Your salary is not your income. The number on your offer letter is your gross pay — what you actually receive is your take-home pay, after taxes and deductions. Here's what comes out and why.
What Gets Deducted
Four categories reduce your gross pay to your net pay:
- Federal income tax — progressive brackets, meaning higher earners pay a higher rate on income above each threshold
- FICA — 6.2% for Social Security + 1.45% for Medicare = 7.65% total (your employer matches)
- State and local income tax — varies by state; nine states have no income tax
- Pre-tax deductions — 401(k) contributions, health insurance premiums, HSA/FSA contributions
The Standard Deduction
In 2025, the standard deduction is $14,600 for singles and $29,200 for married couples filing jointly. This reduces your taxable income before the brackets apply. Most people take the standard deduction rather than itemizing.
A Quick Example
A single person earning $75,000 with 5% 401(k) contributions and $150/month health insurance:
- Gross: $75,000
- 401(k) (5%): -$3,750
- Health insurance: -$1,800
- Taxable income: ~$55,450 (after $14,600 standard deduction)
- Federal tax: ~$6,300
- FICA: -$5,738
- State tax (4%): -$2,218
- Take-home: ~$55,194/year or ~$4,599/month
Your actual paycheck will differ based on your state, benefits, and filing status. Use a calculator for a precise estimate.
Enter your salary and deductions to see your exact take-home pay — annual, monthly, and per paycheck.