How much tax is taken out of my paycheck?

When you look at your paycheck, the number you see as gross pay and the net pay you take home are rarely the same. That difference comes down to taxes and deductions. Understanding what’s withheld can help you plan your budget better and avoid surprises at tax time.

The Main Taxes Withheld From Your Paycheck

1. Federal Income Tax

The biggest slice often comes from federal income tax. How much is taken depends on:

• Your income level
• Filing status (single, married, head of household)
• The W-4 form you submitted to your employer

The IRS adjusts tax brackets each year. For many people, federal withholding ranges from 10% to 22% of gross pay, though higher earners can see up to 37%.

2. FICA Taxes (Social Security & Medicare)

These are mandatory payroll taxes that fund retirement and healthcare benefits:

• Social Security tax: 6.2% of wages (up to the annual wage cap)
• Medicare tax: 1.45% of wages, with an additional 0.9% for very high earners

Together, that’s 7.65% taken out of every paycheck, matched by your employer.

3. State and Local Taxes

If you live in a state with income tax, you’ll see another deduction.

• Some states (like Florida, Texas, and Nevada) don’t tax wages at all.
• Others, like California or New York, may withhold 4% to 10%+, depending on income and brackets.
• In certain cities (like New York City or Philadelphia), there may also be local income taxes.

4. Pre-Tax Deductions

Not technically a “tax,” but important to note: contributions to health insurance, retirement accounts (like 401(k)), or commuter benefits reduce your taxable income. That means you might owe less in federal and state taxes.

5. Post-Tax Deductions

After taxes are applied, your paycheck might still show other deductions like Roth IRA contributions, union dues, or wage garnishments.

Quick Example: $60,000 Salary

Let’s break it down for someone earning $60,000/year, paid biweekly:

• Gross Pay (per check): $2,307
• Federal Income Tax (est.): ~$250
• Social Security: $143
• Medicare: $33
• State Income Tax (assume 5% avg): ~$115
• Net Pay (take-home): ~$1,766

That’s about 23–25% withheld, depending on benefits and state.

How Much of Your Paycheck Goes to Taxes?

On average, workers see between 15% and 30% of gross pay withheld for taxes. Your exact number depends on:

• Income level
• Where you live
• Your W-4 form and exemptions
• Benefits you’ve chosen

Tools to Help You Calculate It

If you want to see a precise number, these resources are worth trying:

• IRS Tax Withholding Estimator
• SmartAsset’s paycheck calculator
• Calculator.net’s take-home pay estimator

FAQs

1. Why does my coworker’s paycheck look different from mine?
Withholdings vary based on income, filing status, and benefits.

2. Can I change how much tax is taken out?
Yes — update your W-4 form with your employer.

3. Do bonuses and overtime get taxed more?
They’re withheld at a higher supplemental rate (often 22% federal).

4. Is Social Security tax optional?
No, unless you qualify for very specific exemptions (rare).

5. How often should I review my paycheck?
At least once a year or when your financial situation changes.