How PayCalc Calculates Take-Home Pay
Every salary, hourly, and after-tax figure on PayCalc is computed from primary sources: the IRS Revenue Procedure for the current tax year, individual state department of revenue publications, and the Social Security Administration's annual FICA wage base announcement. This page documents every assumption we make so you can verify any number we show.
Federal Income Tax
We apply the 2026 marginal federal income tax brackets published in IRS Rev. Proc. 2025-28. Tax is computed on taxable income — gross salary minus the applicable standard deduction — using the bracket-by-bracket method (each dollar is taxed at the rate of the bracket it falls into, not a flat average).
| Taxable Income (Single) | Marginal Rate |
|---|---|
| $0 – $11,925 | 10% |
| $11,926 – $48,475 | 12% |
| $48,476 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,525 | 32% |
| $250,526 – $626,350 | 35% |
| Over $626,350 | 37% |
Source: IRS Rev. Proc. 2025-28 (inflation-adjusted 2026 brackets).
FICA — Social Security & Medicare
FICA is calculated directly on gross wages (not taxable income — FICA is not reduced by standard deductions).
- Social Security (Old-Age, Survivors, and Disability Insurance): 6.2% on wages up to the $176,100 wage base for 2026. Wages above this cap are not subject to the 6.2% tax.
- Medicare (Hospital Insurance): 1.45% on all wages with no cap. (The Additional Medicare Tax of 0.9% on wages over $200,000 is not included in our standard single-filer calculations because it applies to a small minority of earners and requires year-end reconciliation.)
Source: SSA Notice 2025-XX; IRS Publication 15 (Circular E), 2026 edition.
State Income Tax
Each of the 50 states (plus D.C.) is modeled individually. We source rates from each state's department of revenue or equivalent agency for tax year 2026:
- No-income-tax states (9): Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. We show $0 state tax for these states.
- Flat-rate states: States like Colorado (4.40%), Illinois (4.95%), Pennsylvania (3.07%), and others apply one rate to all taxable income. We apply the single statutory rate.
- Graduated-bracket states: States like California, New York, and Minnesota use tiered brackets. We apply the same bracket-by-bracket method as for federal tax, using the single-filer brackets for the relevant tax year.
State tax is applied to gross income minus the state's own standard deduction (where one exists). Some states tie their deduction to the federal amount; others set a fixed dollar figure. We use the 2026 published value for each state.
Standard Deductions Used
| Jurisdiction | Single Filer (2026) | Source |
|---|---|---|
| Federal | $16,100 | IRS Rev. Proc. 2025-28 |
| California | $5,202 | CA FTB 2026 Schedule CA |
| New York | $8,000 | NY DTF IT-201 instructions |
| New Jersey | $1,000 | NJ Division of Taxation |
| Most other states | Varies ($0–$12,000) | Individual state DOR publications |
States without a standard deduction (e.g., Illinois, Pennsylvania) are modeled with $0 deduction — tax applies to full gross income at the state level.
Key Assumptions
Our calculations are designed for the most common scenario. We document every simplification:
Filing Status
All pages default to Single. Married filing jointly, head of household, and married filing separately are different; see your tax professional or the IRS withholding estimator for those scenarios.
W-2 Employee
We model a standard W-2 employee. Self-employed individuals pay the employer half of FICA as well (an additional 7.65%), so their effective FICA burden is approximately double. Contractors should account for self-employment tax separately.
No Pre-Tax Deductions
We do not reduce gross income for 401(k), HSA, FSA, or health insurance premium contributions. These reduce your actual taxable income and will lower your real tax bill. Our figures represent the maximum tax scenario; most employees pay somewhat less.
No Tax Credits
We do not apply the Earned Income Tax Credit (EITC), Child Tax Credit, education credits, or any other credits. Credits directly reduce tax owed dollar-for-dollar and can significantly affect take-home pay for eligible filers.
One State of Residence
We assume all income is earned and taxed in a single state. If you live in one state and work in another, you may owe tax in both (with a credit for taxes paid to the work state). Reciprocity agreements between states can also affect this.
Annual Salary ÷ 2,080 Hours
Hourly equivalents are derived by dividing annual salary by 2,080 — the standard 52 weeks × 40 hours. Hourly workers who are paid only for hours worked (no paid time off) may see slightly different effective annual earnings.
Update Schedule
Federal tax brackets, the standard deduction, and the Social Security wage base are adjusted annually by the IRS and SSA, typically in October–November for the following tax year. We update our data file (src/data/states.js) and rebuild the site within two weeks of each official announcement.
State tax rates and brackets change on varying schedules. We review all 50 states each January when new-year rates take effect, and update mid-year for any states that pass mid-cycle legislation (e.g., rate cuts effective July 1).
The current data set reflects tax year 2026. All pages display a "Last Updated" date so you can verify recency.
Primary Data Sources
Questions or Corrections?
If you spot a discrepancy — a state bracket that's out of date, an incorrect wage base, or a calculation that doesn't match your pay stub — please open an issue or contact us. We take accuracy seriously because these numbers affect real financial decisions.
For personalized tax advice, consult a licensed CPA or tax attorney. PayCalc is an informational resource, not a substitute for professional tax guidance.