Calculation Methodology
The calculator produces a planning estimate from annualized income and the selected tax-year rules. It is not a payroll service, tax return, or guarantee of the amount an employer will withhold.
Last reviewed October 4, 2026 ยท Supports tax years 2025 and 2026
Calculation Sequence
- 01
Annualize gross earnings
Salary inputs are treated as annual amounts. Hourly pay is multiplied by weekly hours and 52 weeks. Overtime, double time, other income, and second-job wages are annualized and added when selected.
- 02
Apply deduction limits
Modeled 401(k), HSA, and FSA contributions are capped at the selected year's statutory limits. HSA and FSA amounts reduce modeled FICA wages; traditional 401(k) contributions reduce income-tax wages but remain subject to FICA.
- 03
Estimate federal income tax
The engine subtracts the modeled standard deduction, applies annual federal brackets, and subtracts modeled Child Tax Credit and Earned Income Tax Credit amounts where applicable. This is an annualized planning method, not a line-by-line reproduction of an employer's Form W-4 payroll calculation.
- 04
Calculate FICA
Social Security is calculated at 6.2% up to the annual wage base. Medicare is calculated at 1.45%, with the additional 0.9% Medicare tax above the applicable wage threshold.
- 05
Calculate state and local amounts
State modules apply zero-tax, flat-rate, progressive, or state-specific methods. Separate payroll programs such as SDI, PFL, PFML, and WA Cares are added where modeled. NYC and a limited registry of municipal or county taxes are applied only when selected.
- 06
Calculate net pay by period
Annual taxes and deductions are subtracted from annual gross pay. The remainder is divided by 52 weekly, 26 biweekly, 24 semimonthly, 12 monthly, or 1 annual pay period.
Core Formula
Important Assumptions
- Income is annualized and assumed to continue for the full year.
- Results do not account for tax already withheld or wages earned earlier in the year.
- State residency and workplace-state interactions are not fully modeled for every multi-state situation.
- Local-tax coverage is limited to NYC and 28 selectable municipal or county jurisdictions.
- Employer-paid taxes, unemployment insurance, FUTA, SUTA, and employer benefit costs are outside the employee take-home calculation.
- Bonuses entered as other income are annualized income, not a dedicated supplemental-wage withholding calculation.
Data Review & Verification
Tax constants are stored in versioned TypeScript modules. Automated unit, property, and source-vector tests check representative calculations and invariants. Published state-page examples are generated from the same calculation engine used by the interactive calculator.
Government publications can change or receive corrections. Check the official sources and report a discrepancy through the feedback page.
Privacy
The calculator runs in your browser. Salary, filing-status, deduction, and result values are not sent to an application server. If you explicitly create a share link, the selected inputs are encoded in that URL and visible to anyone who receives it.