How to Calculate Take-Home Pay: 2026 Guide

Step-by-step guide to understanding gross income, deductions, and net take-home pay

Published January 16, 2026 • 10 min read

What is Take-Home Pay?

Take-home pay is the amount of money you actually receive after all deductions have been removed from your gross income. It's also called net pay or net income. Understanding the difference between gross and net income is crucial for budgeting and financial planning.

The Basic Formula

The calculation is straightforward:

Gross Income - All Taxes - Other Deductions = Take-Home Pay

Step-by-Step Calculation

1. Determine Your Gross Income

Start with your annual salary or total income before any deductions. For 2026:

  • Annual salary from your employer
  • Freelance income
  • Investment income
  • Bonus and commission payments
  • Other income sources

2. Calculate Federal Income Tax

Federal income tax is based on your filing status and income level using progressive tax brackets. For 2026:

  • Single filers: Standard deduction of $15,000
  • Married filing jointly: Standard deduction of $30,000

Then apply the tax brackets to your taxable income (gross income minus standard deduction).

3. Calculate FICA Taxes

FICA taxes are automatically withheld from your paycheck and consist of:

  • Social Security Tax: 6.2% of wages
  • Medicare Tax: 1.45% of wages
  • Total FICA: 7.65% of your gross income

4. Account for State and Local Taxes

Most states have income taxes that vary by location:

  • Some states have no income tax
  • Others range from 2% to 13%
  • Local taxes may apply in certain cities

5. Calculate Your Take-Home Pay

Subtract all taxes from your gross income to get your net take-home pay.

Example Calculation

Scenario: Single filer earning $100,000 in a 5% state tax state

  • Gross Income: $100,000
  • Standard Deduction: -$15,000
  • Taxable Income: $85,000
  • Federal Income Tax: -$9,590
  • FICA (7.65%): -$7,650
  • State Tax (5%): -$5,000
  • Take-Home Pay: $72,760

Use Our Calculator

Want to instantly calculate your take-home pay for 2026? Visit our annual tax calculator to see exactly what you'll take home based on your income, filing status, and state.

Key Takeaways

  • Take-home pay is what you actually receive after taxes
  • Your effective tax rate shows what percentage of income goes to taxes
  • Filing status significantly impacts your tax liability
  • State and local taxes can vary dramatically
  • Regular calculation helps with budgeting and financial planning