Topic guide · updated 2026-07-31
What comes out of a paycheck
Why take-home pay is what it is: how employers compute federal withholding from your Form W-4, what FICA takes and when it stops, how state income tax differs, and why a bonus looks so heavily taxed.
Withholding is a running estimate of your annual tax, computed by a payroll system from a form you filled in — usually once, often years ago. It is not a rate anyone chose for you, and when it looks wrong the cause is nearly always an entry on that form rather than the tax law.
This cluster explains the method payroll actually uses, what changes it, and where state rules diverge from federal ones.
Federal withholding runs on your W-4
Most payroll systems use the annual percentage method in IRS Publication 15-T. Your pay is annualized, a standard reduction is subtracted unless the Step 2 checkbox is ticked, a rate schedule produces a tentative annual figure, Step 3 credits come off, and the total is divided across pay periods. Every input comes from your Form W-4, which is why a stale form produces a surprising refund or bill.
The Step 2 checkbox is the most consequential box
Ticking it tells payroll you have more than one job or a working spouse. It removes the annual reduction and switches to a schedule with brackets roughly half as wide, raising withholding on each job so the combined income is covered. Leaving it unticked across two jobs is the single most common cause of an unexpected balance due.
FICA is flat until it stops
Social Security takes 6.2% of wages until they reach the annual wage base, after which it stops entirely for the year — which is why high earners see take-home pay jump late in the year. Medicare takes 1.45% with no ceiling, plus an extra 0.9% once wages pass $200,000, withheld by the employer regardless of filing status.
State rules diverge sharply
Nine states do not tax wage income at all, though several still deduct employee-paid payroll programs such as paid family leave. Others use a single flat rate, and the rest use graduated brackets with their own deductions and exemptions. Local wage taxes exist in several states and vary by city or county, so this site discloses them rather than computing them.
Bonuses are withheld differently, not taxed differently
A bonus paid separately is supplemental wages, commonly withheld at a flat 22%. That often exceeds the recipient's real marginal rate, which is why bonuses feel punitively taxed and why the difference comes back at filing. The tax owed on a bonus is the same as on any other dollar of income.
Tools in this topic
Every calculator and explainer in this cluster, each built on verified figures with its official source linked.
Paycheck
Estimate take-home pay in any verified state: federal withholding under the IRS Publication 15-T percentage method, Social Security and Medicare, plus that state’s income tax and any employee payroll programs. Computed in your browser, with the approximation disclosed on every result.
Federal Withholding
See how much federal income tax and FICA come out of each paycheck, using the IRS Publication 15-T percentage method your employer’s payroll system uses. Enter gross pay, pay frequency, and your Form W-4 entries to estimate the withholding and what lands in your account.
Bonus Tax
Estimate what a bonus is worth after withholding. Bonuses are supplemental wages: paid separately from regular pay, they are commonly withheld at a flat 22% federal rate — 37% above $1 million for the year — plus Social Security and Medicare. Enter the amount to see an estimate of the net.
Canada Take-Home
Estimate net pay in any verified province using the CRA’s own T4127 payroll formulas: federal and provincial income tax, CPP or QPP contributions, EI premiums, and Quebec’s QPIP. Computed in your browser, and linked back to CRA’s official calculator for the authoritative check.
State Ranking
One salary, every verified state, ranked by what actually reaches your account. Federal tax and FICA are identical everywhere, so the spread comes entirely from state income tax and employee payroll programs — the number that matters for a relocation decision.
Compare Offers
Put two offers side by side on what they are actually worth: after-tax pay in each state, plus employer-paid benefits and the retirement match that never show up in take-home pay. Estimate the total value rather than comparing headline salaries.
Paystub Check
Check a pay stub you have already received against the rules its own numbers can prove: the 6.2% and 1.45% FICA rates, the Social Security wage-base cutoff that stops the tax mid-year, the Additional Medicare threshold, and the federal time-and-a-half overtime floor. Most gaps turn out to be pre-tax deductions.
Guides
Key terms
Frequently asked questions
Most often because your wages reached the Social Security wage base, so the 6.2% stopped for the rest of the year. Medicare continues, since it has no ceiling.
Official sources for this topic
Every figure and rule referenced above is published by one of these agencies, and each of them — not this site — determines what is actually paid.
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