Net pay: what it is and how it is calculated
Net pay is gross pay minus taxes and deductions. Gross is what you earn; net is what you keep. The gap is federal income tax, 7.65% FICA, state and local income tax, and whatever you have elected to have withheld for retirement or insurance.
Net pay calculator
Take-home pay per paycheck (26/yr)
$2,092.60
$54,408 a year from $65,000 gross, in Texas.
Take-home pay $2,092.60 per paycheck (26/yr), $54,408 a year, in Texas.
- Take-home pay 84%
- Federal income tax 9%
- Social Security (6.2%) 6%
- Medicare (1.45%) 1%
Which federal brackets your income fills
2026, singleOnly the part of your income inside each band is taxed at that band's rate. Your taxable income of $48,900 fills the bands below; the darker one is where your last dollar lands, which is your 12% marginal rate.
Breakdown
Texas, 2026| Item | Per paycheck | Per Year | % of gross |
|---|---|---|---|
| Gross pay | $2,500.00 | $65,000 | 100.0% |
| − Federal income tax8.6% | $216.15 | $5,620 | 8.6% |
| − Social Security (6.2%)6.2% | $155.00 | $4,030 | 6.2% |
| − Medicare (1.45%)1.5% | $36.25 | $943 | 1.5% |
| − Texas income tax0.0% | $0.00 | $0 | 0.0% |
| Take-home pay | $2,092.60 | $54,408 | 83.7% |
Your tax rates
- Effective rate 16.3%
- The share of your whole $65,000 that goes to tax. This is the one to quote when comparing offers.
- Marginal rate 12% federal
- What the next dollar you earn is taxed at. Always higher than the effective rate, and it is why a raise never leaves you worse off.
Estimate of annual tax liability spread evenly across pay periods, using 2026 federal rates, the standard deduction and no Texas income tax. Actual withholding depends on your W-4 and is squared up on your return.
Worked example: $65,000 in Illinois, 2026
| Gross pay | $65,000 | $2,500 bi-weekly |
| − 401(k) 5% and health premiums | $5,650 | $217 bi-weekly |
| − Federal income tax | $4,942 | $190 bi-weekly |
| − Social Security 6.2% | $3,881 | $149 bi-weekly |
| − Medicare 1.45% | $908 | $35 bi-weekly |
| − Illinois income tax 4.95% | $2,797 | $108 bi-weekly |
| = Net pay | $46,822 | $1,801 bi-weekly |
Single filer, standard deduction, 5% traditional 401(k), $2,400 a year pre-tax health premiums. Effective tax rate 19.3%.
Frequently asked questions
What is net pay?
Net pay, or take-home pay, is your gross pay minus all withholdings and deductions: federal income tax, Social Security, Medicare, state and local income tax, and pre-tax or post-tax benefit deductions such as retirement contributions and health premiums. It is the figure on the bottom line of your pay stub and the amount deposited.
What is gross pay?
Gross pay is your total earnings before anything is taken out: salary or hourly wages plus overtime, bonuses and commissions. It is the number on your offer letter and the starting point for every calculation.
How do I calculate net pay from gross?
Subtract pre-tax deductions first, then income taxes on the reduced figure, then FICA on gross minus Section 125 benefits. For a $65,000 salary in Illinois with a 5% 401(k) and $2,400 of health premiums, net pay is $46,822 a year, 72% of gross.
What percentage of gross pay is net pay?
Typically 70% to 80% for salaried workers. The share falls as income rises because federal brackets are progressive and Social Security caps out, and it varies by state: no-tax states keep several points more than California or New York.
How many paychecks in a year?
26 if you are paid bi-weekly (every other Friday), 24 if semi-monthly (twice a month, usually the 15th and the last day), 52 weekly and 12 monthly. Bi-weekly is the one that catches people out: two months each year contain three paychecks instead of two, because 26 fortnights do not divide evenly into 12 months. Budgeting on two cheques a month and treating the third as spare is the usual approach.
Why does my net pay change during the year?
Once your wages pass the Social Security wage base ($184,500 in 2026) the 6.2% stops and net pay rises. Benefit elections, a W-4 change, a bonus taxed at the 22% supplemental rate, or reaching a 401(k) limit all move it too.
For the order each deduction is applied in, see everything that comes out of a paycheck. Run your own numbers in the paycheck calculator or pick your state.
Read next
- FICAThe line that is never refunded.
- Every deduction, in orderThe parent page.
- How to read a US pay stub, line by lineWhat each line on a pay stub means, in the order payroll applies it, with a $60,000 example showing how gross becomes net in 2026.
- Bi-weekly versus semi-monthly pay: why your check differsBi-weekly is 26 checks a year, semi-monthly is 24.
Other related calculators
- Paycheck calculatorTake-home pay after federal tax, FICA and state tax, for all 51 US jurisdictions.
- Payroll tax calculatorWhat an employee costs an employer, and what comes out of their pay. Both sides, one page.
- Bonus tax calculatorWhat lands in your account after the flat 22% withholding, and what comes back.
Hadi · Developer and maintainer
Federal tables checked against the IRS 2026 inflation adjustments on . State figures, where quoted, are each state's latest published schedule, 2025; federal figures are 2026.