US Paycheck Explained: Federal Tax, State Tax and FICA Withholding
See how a US gross wage becomes take-home pay through federal tax, state tax and FICA, with a worked $75,000 example across three states and one payslip.
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How US Take-Home Pay Is Calculated: Federal Tax, State Tax and FICA
How is US take-home pay calculated? Your gross wage survives three deductions taken in a fixed order: federal income tax, then state income tax, then FICA, which is Social Security plus Medicare. Federal tax uses the IRS progressive brackets; state tax ranges from nothing, to a flat rate, to the state's own brackets; FICA is a flat payroll tax rather than a bracketed one. Because only the state and local layer changes with location, two identical salaries can land differently. Here is what this page does that the paycheck tool output and a generic salary article cannot: it carries one $75,000 salary from its annual bracket math down to a single bi-weekly payslip, then splits that same salary across a no-tax state, a flat-tax state and a state-plus-city, so you see exactly which line moves and by how much. Every figure uses the 2025 tax year as an illustration.
If you want your own exact figure rather than the mechanics, the take-home paycheck calculator works it out from your gross pay and state; this page explains what that tool is doing so you can read your own payslip. FreeUSUKCalculator.com is free and ad-light, with no sign-up and no data capture.
The three layers, and the one that moves with your address
A US paycheck carries three deductions, not one, and each behaves differently. Federal income tax is the largest and most progressive: the more you earn, the higher the rate on your top dollars. State income tax sits on top and is the layer that makes salaries in different states diverge. FICA is the outlier — not income tax at all but a payroll tax for Social Security and Medicare, charged at flat rates, which is why it shows as its own payslip line rather than folded into income tax. The table below names who sets each deduction, how it is figured, and the single factor that changes it most.
| Deduction | Who sets the rules | How it is figured | Varies most with |
|---|---|---|---|
| Federal income tax | IRS | Progressive brackets after the standard or itemised deduction | Income, filing status and W-4 elections |
| State income tax | Each individual state | None, a flat rate, or the state's own brackets | Which state you work in |
| Social Security | Federal law / SSA | 6.2% of wages up to the annual wage base | Wage level, capped once you pass the base |
| Medicare | Federal law / IRS | 1.45% of all wages, plus 0.9% above a threshold | Total wages, uncapped |
For the 2025 tax year, the employee Social Security rate is 6.2% of wages up to an annual wage base cap (Social Security Administration, ssa.gov, 2025 tax year), and Medicare is 1.45% of all wages with an Additional Medicare Tax of 0.9% on wages above $200,000 for a single filer (Internal Revenue Service, irs.gov, 2025 tax year). You can watch the federal and state layers interact for your own numbers with the US income tax calculator.
Worked example 1: federal tax on a $75,000 single filer
Take a single filer earning $75,000 in 2025 who takes the standard deduction and makes no pre-tax contributions. The 2025 single standard deduction is $15,000 (Internal Revenue Service, irs.gov, 2025 tax year), so the wages actually taxed are $60,000, not the full $75,000. Federal tax is then charged in bands: 10% on the first slice, 12% on the wide middle slice, and 22% only on what is left at the top. For this profile that is roughly $1,193 plus $4,386 plus $2,536, about $8,100 in federal income tax. The top dollar sits in the 22% bracket, yet the whole bill divided by the $75,000 gross is an effective rate near 10.8%, less than half the headline bracket. That gap is why sitting "in the 22% bracket" never means 22% of your pay disappears as federal tax.
Worked example 2: the same $75,000 across three states
Now hold that salary steady and change only geography. Federal tax and FICA are identical in all three columns below; only the state and local layers move. Several states — Texas, Florida and Washington among them — levy no state income tax on wages (Tax Foundation, taxfoundation.org, 2025), while some cities charge a local income tax on top. These are rounded 2025 illustrations, not a quote for your situation.
| Layer (2025, single, $75,000 gross) | No-income-tax state (e.g. Texas, Florida) | State with a flat 5% wage tax | Flat 5% state plus a ~3% city tax |
|---|---|---|---|
| Federal income tax | about $8,100 | about $8,100 | about $8,100 |
| Social Security (6.2%) | about $4,650 | about $4,650 | about $4,650 |
| Medicare (1.45%) | about $1,088 | about $1,088 | about $1,088 |
| State income tax | $0 | about $3,750 | about $3,750 |
| City / local income tax | $0 | $0 | about $2,250 |
| Take-home pay, annual | about $61,160 | about $57,410 | about $55,160 |
| Take-home pay, monthly | about $5,097 | about $4,784 | about $4,597 |
Same salary, same federal tax, same FICA, yet about $6,000 a year separates the first column from the third, entirely because of state and local layers. That spread is why a single nationwide take-home figure misleads, and why every money page here states which rules and year it applies.
Why does someone in another state take home more on the same salary?
Because federal income tax and FICA are identical nationwide for a given profile, the only layer that changes with location is state, and sometimes city, income tax. In a no-income-tax state a larger share of gross pay survives to take-home. That does not make those states cheaper overall, since they often raise revenue through sales or property taxes instead. For the paycheck itself, though, the absence of a state income layer is real money in hand.
Worked example 3: one bi-weekly paycheck, line by line
Annual figures are tidy, but your stub shows a per-period slice. Paid every two weeks, that salary is spread over 26 checks, so $75,000 divided by 26 is $2,884.62 of gross per paycheck. The table breaks one of those checks into its deductions, comparing a no-income-tax state with a flat 5% state so you can match each line to your own stub.
| Line on one bi-weekly check | No-income-tax state | Flat 5% state |
|---|---|---|
| Gross pay | $2,884.62 | $2,884.62 |
| Federal income tax | −$311.54 | −$311.54 |
| Social Security | −$178.85 | −$178.85 |
| Medicare | −$41.83 | −$41.83 |
| State income tax | $0.00 | −$144.23 |
| Net per check | about $2,352.40 | about $2,208.17 |
The $144.23 difference on a single check is the flat 5% state tax spread over the pay period. Across 26 checks it compounds to the roughly $3,750 in the annual table — the same money shown at the cadence your bank actually sees.
Worked example 4: where FICA stops — the cap and the 0.9% surtax
FICA is flat, but it has an upper limit on one side and a surcharge on the other. Social Security is charged at 6.2% only on wages up to the annual wage base cap set by the SSA; earnings above that point attract no further Social Security (Social Security Administration, ssa.gov, 2025 tax year). That produces a quirk: a worker earning far above the cap pays the same Social Security dollars as someone sitting exactly at it, so a very high earner's effective Social Security rate falls well below 6.2%. Medicare works the opposite way: 1.45% applies to every dollar, and an Additional Medicare Tax of 0.9% is added on wages over $200,000 for a single filer (Internal Revenue Service, irs.gov, 2025 tax year). A single worker on $250,000 pays that extra 0.9% only on the $50,000 above the threshold, which is $450 on top of the standard Medicare line. The retirement side of what you pay in is estimated by the Social Security benefit estimator.
The tax year and your W-4 both change this number
Two things this page holds fixed can move a real paycheck on their own. First, the tax year: every figure here is the 2025 tax year, and the IRS brackets, the $15,000 single standard deduction, the Social Security wage base and the list of no-income-tax states can each change from one year to the next, so a 2025 calculation is not a 2026 one. Second, your Form W-4: federal withholding follows the filing status, dependents and any extra amount you enter on it, which means two colleagues on the same $75,000 gross can see different federal lines purely because one claimed dependents and the other did not. Neither of these changes your gross; both change what reaches your bank.
What a real paycheck removes that this model does not
Beyond the three tax layers, a real paycheck usually has non-tax items removed too, and the basic model above does not add them. Each can move your net pay noticeably.
- Local and city income taxes. A number of cities and a few counties charge their own income tax on top of state tax; New York City is a well-known example, as the third column above showed.
- 401(k) and other pre-tax retirement contributions. Money routed into a traditional 401(k) lowers your taxable wages, cutting income tax now while shrinking your take-home. You can project the long-term side of that trade-off with the US retirement calculator.
- Employer health-insurance premiums. Your share of medical, dental or vision premiums is usually deducted, often pre-tax, and is not part of the tax layers themselves.
- Other benefits and orders. HSA or FSA contributions, life insurance, union dues and any wage garnishments also come out of a real paycheck but are not tax.
Is the amount withheld each payday your final tax bill?
No — the amount withheld each payday is only an estimate your employer sends to the IRS on your behalf, not your final, settled tax bill.
The federal figure is driven by your Form W-4, so it reflects your filing status, any dependents, and any extra withholding you request; changing those changes the amount withheld even when your salary has not moved. At year end you file a return that reconciles what was withheld against what you actually owe: too much withheld means a refund, too little means you pay the difference. The salary calculator helps when you compare job offers and want the same gross expressed as hourly, monthly and annual take-home.
Limits and next steps
Treat every figure here as a rounded estimate for the 2025 tax year, meant to explain the mechanics rather than to file with. Rates, brackets, the Social Security wage base and the list of no-income-tax states can all shift between years, and your own paycheck depends on details this general model cannot see. For anything with real money at stake, confirm the current numbers with the IRS and your state's tax agency, or speak to a qualified tax professional. Nothing on this page is tax advice. If filing jointly changes your picture, the marriage tax calculator models the difference.
Frequently asked questions
Is FICA the same as income tax?
No. FICA is a separate payroll tax that funds Social Security and Medicare, charged at flat rates, while federal and state income taxes use brackets. They appear as different lines on your payslip and are calculated independently.
Why is my tax bracket higher than the tax I actually pay?
Your bracket is your marginal rate, the rate on your top dollars only. Lower slices of income are taxed at lower rates, and the standard deduction shields part of your pay entirely, so the effective rate across your whole salary is lower. In the $75,000 example above, a 22% top bracket resolves to about a 10.8% effective federal rate.
Does a bigger 401(k) contribution increase my take-home pay?
No. A traditional 401(k) contribution lowers your taxable wages and the income tax on them, but the contribution still leaves your paycheck, so your immediate take-home is smaller. The benefit is future retirement savings, not a bigger cheque today.
Sources and how to verify current figures
Rates and thresholds change most years, so confirm the current numbers before relying on them:
- Social Security employee rate and annual wage base: Social Security Administration — Contribution and Benefit Base, ssa.gov/oact/cola/cbb.html (2025 tax year).
- Medicare rate and the Additional Medicare Tax threshold: Internal Revenue Service — Topic no. 751, irs.gov/taxtopics/tc751 (2025 tax year).
- Single standard deduction: Internal Revenue Service — Topic no. 551, irs.gov/taxtopics/tc551 (2025 tax year).
- States with no wage income tax: Tax Foundation — State Individual Income Tax Rates and Brackets, taxfoundation.org (2025).