Gross pay is the headline number on your offer letter — your full salary before anything is taken out. Net pay, also called take-home pay, is the smaller number that actually reaches your bank account after taxes and deductions. The gap between them is usually 15% to 30% of gross for a typical US salary, driven mostly by federal income tax, FICA, and your state. Everything below is a simplified 2026 estimate for general education, not tax advice; sources are the IRS and SSA.
What is the difference between gross and net pay?
- Gross pay = your stated annual salary (or hourly rate times hours).
- Net pay = gross pay − federal income tax − FICA − state/local income tax − pre-tax deductions.
The journey from one to the other has a fairly predictable order. Pre-tax deductions come out first (lowering the income that gets taxed), then taxes are calculated, and what’s left is your take-home pay.
Where does each dollar of your paycheck go?
Here is an estimated breakdown for a single filer earning $75,000, comparing a no-income-tax state (Texas) with a high-tax state (California), for the 2026 tax year. These figures match our take-home pay calculator.
| Component | Texas ($75k single) | California ($75k single) |
|---|---|---|
| Gross salary | $75,000 | $75,000 |
| Federal income tax | −$7,670 | −$7,670 |
| Social Security (6.2%) | −$4,650 | −$4,650 |
| Medicare (1.45%) | −$1,088 | −$1,088 |
| State income tax | −$0 | −$2,941 |
| Net (take-home) pay | $61,593 | $58,652 |
| Effective tax rate | 17.9% | 21.8% |
| Roughly per month | $5,133 | $4,888 |
Same gross salary, but the Texan keeps about $2,941 more per year — purely because of state income tax. See the full ranking on our take-home pay by state page.
What are the mandatory paycheck deductions?
Three federal items apply to essentially every wage earner:
- Federal income tax. Withheld based on the 2026 federal brackets and your W-4. It applies to taxable income (gross minus deductions), not gross directly.
- Social Security tax. 6.2% of wages up to the 2026 wage base of $184,500.
- Medicare tax. 1.45% of all wages, with an extra 0.9% above $200,000 (single).
Most states add state income tax, and some cities (e.g., New York City, many Ohio and Pennsylvania municipalities) add local income tax that our estimates do not model.
What are pre-tax deductions and why do they matter?
Pre-tax deductions come out of gross pay before income tax is calculated, so they lower your taxable income:
- Traditional 401(k) / 403(b) contributions
- Health, dental, and vision insurance premiums
- HSA and FSA contributions
Because these reduce taxable income, they cut your federal and (usually) state income tax. A dollar contributed pre-tax costs you less than a dollar of take-home pay. Note: our calculator deliberately uses the standard deduction only and excludes pre-tax contributions, so it shows a conservative, transparent baseline — your real net pay may be higher if you contribute pre-tax.
How can I estimate my own net pay?
- Start with gross salary.
- Subtract pre-tax deductions (if any) to get taxable wages.
- Subtract federal income tax using the 2026 brackets after the standard deduction.
- Subtract FICA (6.2% + 1.45%).
- Subtract state income tax for your state.
Or skip the math: the take-home pay calculator does all five steps for any salary, filing status, and state.
Sources and disclaimer
- IRS — Federal income tax rates and brackets
- IRS — Topic No. 751, Social Security and Medicare withholding
- SSA — Social Security wage base
Not tax advice. All figures are simplified 2026 estimates that exclude local taxes, tax credits, and pre-tax deductions unless stated. Verify with the IRS and your state Department of Revenue. See our methodology and disclaimer.