How we calculate your take-home pay
USNetPay reproduces the method payroll software uses: annualize your pay, apply each official 2026 withholding formula to the annual amount, then divide by your number of pay periods. Last reviewed October 31, 2026.
1. Gross pay
Salary is used as entered. Hourly pay is hourly rate × hours per week × 52, plus overtime hours × 1.5 × hourly rate × 52. Pay periods: weekly 52, biweekly 26, semimonthly 24, monthly 12.
2. Pre-tax deductions
- Traditional 401(k) contributions reduce wages for federal income tax and most state income taxes, but not for Social Security and Medicare. Pennsylvania taxes them.
- Section 125 health insurance premiums reduce wages for federal income tax, FICA and state income tax.
3. Federal income tax (IRS Publication 15-T, Worksheet 1A)
- Annual taxable wages = annualized pay minus pre-tax deductions.
- If the Form W-4 Step 2 box is not checked, subtract $12,900 (married filing jointly) or $8,600 (single, head of household). This is the Adjusted Annual Wage Amount.
- Find the tentative annual withholding in the 2026 Annual Percentage Method table for automated payroll systems (STANDARD schedule, or the Step 2 checkbox schedule).
- Subtract Step 3 credits: $2,200 per child under 17 and $500 per other dependent.
- Divide by the number of pay periods.
For reference, the 2026 standard deduction on your tax return is $16,100 (single), $32,200 (married filing jointly) and $24,150 (head of household). Withholding builds this in through the table offsets.
4. Social Security and Medicare (FICA)
Social Security is 6.2% of wages up to the 2026 wage base of $184,500. Medicare is 1.45% of all wages, and employers withhold an extra 0.9% on wages above $200,000 in a year. We spread annual FICA evenly across paychecks; in real payroll, high earners stop paying Social Security once they pass the wage base.
5. State and local income tax
Each state uses its own published 2026 method. Unless you change it, we assume one allowance for you, one for a spouse when married filing jointly, and one per dependent on states whose forms count them.
- California: EDD Method B. Low-income exemption, standard deduction, annual tax rate table, minus $168.30 per allowance. SDI 1.3% with no cap.
- New York: NYS-50-T-NYS Method II exact calculation with annual schedules; Method III above $1,077,550 (single) or $2,155,350 (married). PFL 0.432% up to $411.91; disability insurance 0.5% up to $0.60 a week. New York City: NYS-50-T-NYC annual schedule.
- New Jersey: NJ-W4 annual Rate Table A or B after $1,000 per allowance. TDI 0.19% and FLI 0.23% up to $171,100; UI/WF/SWF 0.425% up to $44,800.
- North Carolina: NC-30 annualized method, 4.09% after the $12,750 standard deduction ($19,125 head of household) and $2,500 per allowance.
- Illinois: IL-700-T, 4.95% after $2,925 per allowance.
- Pennsylvania: 3.07% of compensation, 401(k) included; UC 0.07%. Philadelphia residents 3.735% from July 1, 2026.
- Ohio: percentage method effective August 1, 2026: $650 per exemption, then 1.6%, 2.99% and 3.4% bands.
- Georgia: 4.99% after the standard deduction ($15,000, or $30,000 married filing jointly with one income) and $5,000 per dependent.
- Texas and Florida: no state income tax.
6. How we test the math
Before every release, an automated test runs the engine against worked examples printed in the official publications (for example EDD Method B examples E and F, the NC-30 annualized example and the Georgia employer guide example) and against rows of the IRS tables. A release fails if any result is off by more than two cents.
7. What we don't include yet
- City income taxes outside New York City and Philadelphia (for example Ohio municipalities and Pennsylvania local earned income tax).
- Supplemental-rate withholding on bonuses, and the federal deductions for qualified tips and overtime, which affect your annual return rather than withholding.
- Year-to-date effects such as reaching the Social Security wage base mid-year.
Update schedule
Rates are reviewed every January when the IRS and states publish new withholding tables, and whenever a state changes rates mid-year (as Georgia and Ohio did in 2026).
States covered
Texas, California, New York, Florida, North Carolina, Illinois, Pennsylvania, Ohio, New Jersey, Georgia.
Sources
Every rate and threshold on this page comes from these official publications. Last checked October 31, 2026.
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments)
- SSA, Contribution and Benefit Base
- Texas Comptroller, Texas has no personal income tax
- EDD, 2026 California Withholding Schedules, Method B
- EDD, Rates and Withholding (SDI 2026)
- NYS-50-T-NYS (1/26), New York State Withholding Tax Tables and Methods
- NYS-50-T-NYC (1/26), New York City Withholding Tax Tables and Methods
- New York Paid Family Leave, 2026 updates
- Florida Department of Revenue, no personal income tax
- NCDOR, NC-30 Income Tax Withholding Tables and Instructions (2026)
- IDOR, IL-700-T Illinois Withholding Tax Tables (2026)
- PA DOR, Personal Income Tax Rates
- City of Philadelphia, Wage Tax (employers)
- Ohio Department of Taxation, Percentage Method (effective August 1, 2026)
- NJ Division of Taxation, NJ-WT Withholding Instructions
- NJ Division of Taxation, Form NJ-W4 rate tables
- NJDOL, Rate information, contributions and due dates
- Georgia DOR, 2026 Employer's Tax Guide