How to use this payroll calculator
Work top to bottom through the five input groups. Every field updates the results instantly, and the calculator runs the same steps a payroll department follows for a 2026 paycheck.
- Pay. Choose salary or hourly and the pay frequency. Hourly pay accepts regular and overtime hours; overtime is paid at 1.5× the base rate. The year-to-date wages field only matters if the employee has already earned more than $184,500 this year or is approaching $200,000, because those figures cap Social Security tax and trigger Additional Medicare tax.
- Federal W-4. Copy the entries from the employee's current Form W-4: filing status, whether the Step 2(c) box is checked, the Step 3 credit amount, and any Step 4 adjustments. Leave Step 3 and 4 at zero for a plain W-4 with only a filing status.
- State. Pick the work state. The fields below the selector change depending on that state's own form: some use allowances, some use a filing status, and nine have no wage tax at all. Notes under the selector explain what is and is not included.
- Deductions. Enter per-paycheck amounts. Traditional 401(k) and Section 125 benefits are pre-tax; Roth 401(k) and the "other" field are taken after tax.
- Employer. Enter the SUTA rate and wage base from your state unemployment notice to see the full cost of the employee, not just their take-home pay.
Toggle between Per paycheck and Annual above the results. The annual view runs the whole year in one pass, so the Social Security cap is applied correctly for high earners.
How paycheck withholding is calculated in 2026
Federal income tax withholding follows IRS Publication 15-T, Worksheet 1A, the percentage method that every automated payroll system uses. For a 2020-or-later W-4 the steps are:
- Annualize wages. Multiply the taxable wages for the period by the number of pay periods (52, 26, 24 or 12).
- Adjust for the W-4. Add Step 4(a) other income. Subtract Step 4(b) deductions plus a fixed adjustment of $12,900 for married filing jointly or $8,600 for everyone else. If the Step 2(c) box is checked, the fixed adjustment is skipped entirely.
- Look up the tentative tax. Apply the 2026 annual percentage-method table for the filing status. The standard table for a single filer taxes nothing on the first $7,500, then 10% to $19,900, 12% to $57,900, 22% to $113,200, 24% to $209,275, 32% to $263,725, 35% to $648,100 and 37% above that. Those thresholds are the 2026 tax brackets shifted by the standard deduction ($16,100 single, $32,200 joint, $24,150 head of household) less the adjustment in step 2. The Step 2 checkbox tables use half-width brackets so two earners are not under-withheld.
- Divide and credit. Divide the annual tax by pay periods, subtract the Step 3 credit divided the same way (never below zero), then add any Step 4(c) extra withholding.
The result is only an estimate of the year's tax bill, and the point of the W-4 is to make that estimate close. A refund means the W-4 over-withheld; a balance due means it under-withheld.
FICA: Social Security and Medicare in 2026
FICA is simpler than income tax but has two thresholds that change each year.
| Tax | Employee rate | Employer rate | 2026 limit |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | Wages up to $184,500 (max $11,439 each) |
| Medicare | 1.45% | 1.45% | No limit |
| Additional Medicare | 0.9% | None | Wages over $200,000 in the calendar year |
The Social Security wage base rose from $176,100 in 2025 to $184,500 in 2026. Once an employee's year-to-date wages pass it, Social Security withholding stops for the rest of the year and take-home pay jumps. The Additional Medicare Tax works the opposite way: it starts once year-to-date wages pass $200,000, and employers must withhold it regardless of the employee's filing status, even though the employee's actual threshold on their return may be $250,000 (joint) or $125,000 (separate).
Pre-tax deductions do not all treat FICA the same way. Section 125 cafeteria-plan deductions (health, dental and vision premiums, health FSA, and HSA contributions through payroll) reduce FICA wages. Traditional 401(k), 403(b) and 457 deferrals do not: they cut income tax withholding but the full wage is still subject to Social Security and Medicare. The same goes for state disability and paid-leave premiums such as California SDI, New York PFL and New Jersey TDI/FLI, which are charged on the pre-401(k) wage. Pennsylvania goes further and taxes 401(k) deferrals for state income tax as well.
Worked example: a $60,000 salary paid biweekly
Single filer, plain W-4 (no Step 2, 3 or 4 entries), Texas, no benefits, employer SUTA 2.7% on a $9,000 wage base.
| Line | Per paycheck | Annual |
|---|---|---|
| Gross pay | $2,307.69 | $60,000.00 |
| Federal income tax | $193.08 | $5,020.00 |
| Social Security (6.2%) | $143.08 | $3,720.00 |
| Medicare (1.45%) | $33.46 | $870.00 |
| Texas income tax | $0.00 | $0.00 |
| Take-home pay | $1,938.07 | $50,390.00 |
| Effective tax rate | 16.0% | 16.0% |
| Employer Social Security + Medicare | $176.54 | $4,590.00 |
| Employer FUTA (0.6% of first $7,000) | $13.85 | $42.00 |
| Employer SUTA (2.7% of first $9,000) | $62.31 | $243.00 |
| Total cost to employer | $2,560.39 | $64,875.00 |
The federal figure comes straight from the method above: $60,000 − $8,600 = $51,400 adjusted annual wages; $1,240 + 12% × ($51,400 − $19,900) = $5,020; divided by 26 = $193.08. Notice that the employer's payroll taxes add about 8% to the salary even before health insurance, retirement matching or workers' compensation.
How W-4 choices change take-home pay
Using the same $60,000 biweekly employee:
- Checking Step 2(c). The checkbox switches to the half-width table and drops the $8,600 adjustment. Annual withholding rises from $5,020 to $8,785, or from $193.08 to $337.88 per paycheck. That is correct if there is a second job or working spouse of similar income; otherwise it is a large interest-free loan to the Treasury.
- Claiming two children in Step 3. A $4,400 credit ($2,200 per qualifying child in 2026) is spread over 26 paychecks, cutting withholding by $169.23 each, to $23.85. Enter the annual dollar amount, not a count of dependents.
- Adding $2,000 of 4(b) deductions. This reflects itemized deductions above the standard deduction and reduces withholding by 12% of $2,000, about $9.23 per paycheck.
- Entering $50 in 4(c). Extra withholding is added dollar for dollar after everything else. It is the simplest way to cover side income, or to compensate when both spouses skip Step 2.
Filing status alone matters too. Switching the same wage from single to married filing jointly moves the adjustment to $12,900 and widens every bracket, which lowers federal withholding to $2,840 a year. That is right when the spouse has no income and wrong when they do; the Step 2(c) box exists to fix the latter case.
State withholding: an overview
The calculator implements each state's own 2026 employer withholding formula, including mandatory employee-paid programs such as California SDI (1.3%, no wage cap), Massachusetts PFML (0.46% employee share), Colorado FAMLI (0.44%), Connecticut Paid Leave (0.5%), Hawaii TDI, Washington PFML and WA Cares, and Oregon's paid leave and transit taxes.
| No wage tax (9) | Flat-rate states (2026 withholding rate) |
|---|---|
| Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming | Arizona (elected 0.5%–3.5%, default 2.0%), Colorado 4.4%, Georgia 4.99%, Idaho 5.3%, Illinois 4.95%, Indiana 2.95%, Iowa 3.8%, Kentucky 3.5%, Louisiana 3.09%, Massachusetts 5% (9% over $1,107,750), Michigan 4.25%, Mississippi 4% over $10,000, North Carolina 4.09%, Pennsylvania 3.07%, Utah 4.45% |
Everything else uses graduated brackets, and a few states have unusual mechanics: Alabama subtracts your federal withholding before applying its rates, Connecticut applies a recapture and a phase-out add-back at higher incomes, and Maryland folds a county income tax into the same table (this calculator uses the 3.20% rate charged by Baltimore City and most large counties).
Local taxes are the biggest gap in any online calculator. Indiana counties, Ohio and Pennsylvania municipalities, Michigan cities, Maryland counties other than the default, Kansas City, St. Louis, and cities in Alabama and Kentucky all levy their own wage taxes. When a state's note says local taxes are excluded, add them yourself or expect a lower real net pay.
The true cost of an employee
Employers rarely budget for payroll taxes when quoting a salary, and they are not small. For every dollar of wages the employer pays 7.65% in matching Social Security and Medicare (6.2% until the $184,500 cap, 1.45% forever), 0.6% FUTA on the first $7,000 (the 6.0% statutory rate minus the 5.4% credit for paying state unemployment on time), and SUTA at the rate on the annual notice from the state workforce agency. New employers usually start at a standard rate of 2.7%–3.4%; experienced employers with layoffs can pay 6%–10% or more on wage bases that range from $7,000 in a few states to over $70,000 in Washington.
On the $60,000 example the employer's taxes come to $4,875 a year, so the employee costs $64,875 before benefits. If you are deciding between hiring and contracting, compare that figure with the contractor's invoice, and remember the contractor pays both halves of FICA themselves. Our self-employment tax calculator shows what that looks like from the contractor's side, and the hourly to salary calculator converts between rate and annual pay when the two offers are quoted differently.
Common mistakes
- Using the wrong pay frequency. Semimonthly (24) and biweekly (26) look similar but produce different annualized wages and different bracket positions. Two extra paychecks a year is not a rounding error.
- Treating 401(k) as FICA-exempt. It is not. Only Section 125 benefits reduce Social Security and Medicare wages.
- Entering a dependent count in Step 3. The 2020+ W-4 wants a dollar amount ($2,200 per qualifying child under 17, $500 per other dependent in 2026). Entering "2" understates the credit by more than $4,000.
- Copying the federal filing status to the state form. Several states define statuses differently: Georgia and Missouri give the larger married deduction only when the spouse does not work, Connecticut uses withholding code letters, and California treats a two-income married couple like a single filer.
- Ignoring the Additional Medicare Tax. Employers must start withholding 0.9% the moment year-to-date wages pass $200,000, even if the employee expects to owe none on a joint return.
- Forgetting that the annual view assumes steady pay. Bonuses, commissions and raises mid-year change the bracket the percentage method lands in. Supplemental wages paid separately are usually withheld at a flat 22%.
When to use payroll software instead
This calculator is accurate for a single regular paycheck and is a good way to sanity-check a payroll provider's stub or to model an offer before extending it. It does not file anything. Once you have employees, you also owe federal deposits on a semiweekly or monthly schedule, quarterly Form 941, annual Forms 940 and W-2, state withholding and unemployment returns, new-hire reporting, and in many states paid-leave premium filings. Missing a deposit costs 2%–15% in penalties, and a late 941 adds 5% a month.
Payroll software handles those calendars, applies local taxes by address, tracks the Social Security cap and paid-leave caps across the year, and produces year-end forms. Most accounting packages for small businesses either include payroll or connect to a payroll service; see our review of the best accounting software for small business for options that combine bookkeeping with payroll, and use the timesheet template to collect the hours you feed into it.