Take-Home Pay Calculator Formula
Understand the math behind the take-home pay calculator. Each variable explained with a worked example.
Formulas Used
Annual Take-Home
net_annual = gross_annual - fica - federal_tax - state_tax - retirementMonthly Take-Home
net_monthly = (gross_annual - fica - federal_tax - state_tax - retirement) / 12Total Annual Deductions
total_deductions = fica + federal_tax + state_tax + retirementVariables
| Variable | Description | Default |
|---|---|---|
gross_annual | Gross Annual Salary(USD) | 60000 |
federal_rate | Effective Federal Tax Rate(%) | 12 |
state_rate | State Tax Rate(%) | 5 |
retirement_pct | 401(k) / Retirement Contribution(%) | 6 |
fica | Derived value= gross_annual * 7.65 / 100 | calculated |
federal_tax | Derived value= gross_annual * federal_rate / 100 | calculated |
state_tax | Derived value= gross_annual * state_rate / 100 | calculated |
retirement | Derived value= gross_annual * retirement_pct / 100 | calculated |
How It Works
How Take-Home Pay Is Calculated
Your take-home pay is the gross salary minus all deductions: federal income tax, state income tax, FICA (Social Security + Medicare), and retirement contributions.
Formula
Net Pay = Gross - Federal Tax - State Tax - FICA (7.65%) - Retirement
FICA includes Social Security (6.2%) and Medicare (1.45%), totaling 7.65% on wages up to the Social Security cap.
Worked Example
Annual salary of $60,000 with 12% federal rate, 5% state, 6% retirement.
gross_annual = 60000federal_rate = 12state_rate = 5retirement_pct = 6
- 01FICA = $60,000 x 7.65% = $4,590
- 02Federal tax = $60,000 x 12% = $7,200
- 03State tax = $60,000 x 5% = $3,000
- 04Retirement = $60,000 x 6% = $3,600
- 05Total deductions = $4,590 + $7,200 + $3,000 + $3,600 = $18,390
- 06Net annual = $60,000 - $18,390 = $41,610
- 07Net monthly = $41,610 / 12 = $3,467.50
Ready to run the numbers?
Open Take-Home Pay Calculator