Calculate employee payroll with gross pay, taxes, and deductions. Get accurate net pay calculations with detailed breakdowns of all withholdings and take-home pay.
Typical range: 10-37%
Enter 0 if no state tax
401(k), health insurance, HSA, etc.
Payroll calculation is the process of determining an employee's take-home pay (net pay) after deducting various taxes and withholdings from their gross pay. Accurate payroll calculations are essential for compliance with tax laws, maintaining employee trust, and proper financial planning for both employers and employees.
The calculation follows this sequence: Gross Pay → Federal Tax → State Tax → FICA → Other Deductions → Net Pay. Understanding each component helps employees plan their finances and helps employers ensure compliance with payroll tax regulations.
Gross Pay:
Total earnings before any deductions
Salary: Annual salary / pay periods per year
Hourly: Hours worked × Hourly rate
Overtime Pay:
Additional pay for hours over 40 per week
Typically 1.5× regular hourly rate
Bonuses & Commissions:
Additional compensation beyond base pay
May be taxed at supplemental rate (22%)
Federal Income Tax:
Based on W-4 form and tax brackets
Progressive rates from 10% to 37%
State Income Tax:
Varies by state (0% to ~13%)
9 states have no income tax
FICA Taxes:
Social Security (6.2%) + Medicare (1.45%)
Total: 7.65% of gross pay
Other Deductions:
401(k), health insurance, HSA, FSA
Pre-tax or post-tax depending on type
FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare programs. Both employees and employers contribute equal amounts:
| Tax Type | Employee Rate | Employer Rate | Wage Base Limit | Notes |
|---|---|---|---|---|
| Social Security | 6.2% | 6.2% | $168,600 (2024) | No tax on earnings above limit |
| Medicare | 1.45% | 1.45% | No limit | Applies to all wages |
| Additional Medicare | 0.9% | 0% | $200k single / $250k married | High earners only |
| Total FICA | 7.65% | 7.65% | Varies | Standard rate for most employees |
Self-employed individuals pay both employee and employer portions (15.3% total) but can deduct the employer portion on their tax return.
Federal income tax is withheld based on your W-4 form selections and IRS tax brackets. The amount withheld depends on your filing status, number of dependents, and additional withholding requests:
| Tax Bracket | Single Filers | Married Filing Jointly | Rate |
|---|---|---|---|
| 10% | $0 - $11,600 | $0 - $23,200 | 10% |
| 12% | $11,601 - $47,150 | $23,201 - $94,300 | 12% |
| 22% | $47,151 - $100,525 | $94,301 - $201,050 | 22% |
| 24% | $100,526 - $191,950 | $201,051 - $383,900 | 24% |
| 32% | $191,951 - $243,725 | $383,901 - $487,450 | 32% |
| 35% | $243,726 - $609,350 | $487,451 - $731,200 | 35% |
| 37% | $609,351+ | $731,201+ | 37% |
Tax brackets are progressive - you only pay the higher rate on income within that bracket, not your entire income. Use the IRS Tax Withholding Estimator to ensure accurate withholding.
State income tax varies significantly by location. Some states have no income tax, while others have progressive rates similar to federal taxes:
• Alaska
• Florida
• Nevada
• New Hampshire (dividends & interest only)
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming
• California: 13.3% (highest bracket)
• Hawaii: 11%
• New York: 10.9%
• New Jersey: 10.75%
• Oregon: 9.9%
• Minnesota: 9.85%
• District of Columbia: 10.75%
Most states: 3-7% range
Beyond taxes, employees may have various voluntary and mandatory deductions that reduce their net pay:
Reduce taxable income, lowering overall tax burden:
Deducted after taxes are calculated:
Single filer, $45,000 annual salary, bi-weekly pay (26 periods):
Take-home: 75% of gross pay
Married filing jointly, $95,000 annual salary, semi-monthly pay (24 periods):
Take-home: 54% of gross pay
Single filer, $150,000 annual salary, bi-weekly pay (26 periods):
Take-home: 50% of gross pay
Married filing jointly, $250,000 annual salary, monthly pay (12 periods):
Take-home: 58% of gross pay
Calculate gross and net profit margins
Calculate markup percentage
Calculate break even point
Calculate sales commission
Calculate salary and take-home pay
Convert hourly to annual salary