How to increase your take-home pay

Computed on $60,000, single, in California, where take-home starts at $47,877. The first two cost you nothing at all.

• Check your filing status +$2,108 a year

  If you are unmarried and keep a home for a dependent, you are probably head of household, not single. Nothing flags this for you, and people overpay for years.

• Claim the dependents you have +$2,200 a year

  One qualifying child under 17. The credit comes off the tax itself rather than off your income, which is why it is worth so much more than a deduction of the same size.

• Use a section 125 health, HSA or FSA plan +-$2,194 a year

  On $3,000 through payroll. This is the only lever here that reduces Social Security and Medicare as well as income tax.

Put 10% of $60,000 into a traditional 401(k) and your total tax falls by $1,152. Your take-home also falls, from $47,877 to $43,029, because $6,000 went into your retirement account rather than your bank account.

That is not an argument against it. Deferring pay you do not need, with an employer match, is usually the best financial decision available to a salaried person. It is an argument against calling it a way to increase take-home pay, which it is not.

A traditional 401(k) reduces income tax but leaves Social Security and Medicare untouched. Defer $6,000 and FICA stays exactly where it was, at $4,590. Route the same $6,000 through a section 125 health plan, HSA or FSA and FICA falls too, saving a further $459.

One condition does all the work: it must go through payroll. An HSA you fund yourself from a bank account is deductible against income tax but not against FICA, so it loses that 7.65% entirely.

Every figure above is $60,000 in California. Your state changes all of them, sometimes a lot, so run yours: the calculator takes dependents, a 401(k) percentage and a health premium, and there is a page for each of the 51 jurisdictions. Filing status is priced state by state on the filing status page.