Home / Methodology
How the calculator works
The calculator estimates your full-year taxes, then divides them evenly across your paychecks. That matches how the current Form W-4 withholding method works for a single job with no extra adjustments.
Steps
- Annual gross pay is your salary, or hourly rate times hours times 52, with overtime at 1.5 times your rate.
- Pre-tax health insurance is subtracted before all taxes. 401(k) contributions are subtracted before income tax but not before Social Security and Medicare. A few states, such as Pennsylvania, tax 401(k) contributions.
- Federal income tax uses the 2026 standard deduction and brackets for your filing status, minus the $2,200 child tax credit for each child under 17, reduced above $200,000 of income ($400,000 for married couples).
- Social Security is 6.2% of wages up to $184,500. Medicare is 1.45% of all wages plus 0.9% above $200,000.
- State income tax uses each state's 2026 brackets, standard deduction, and exemptions. State payroll programs such as disability and paid family leave insurance are applied with their wage caps.
- Local income tax, where common, uses a typical rate you can change.
What it does not include
- Bonuses, supplemental wages, and tips, which employers often withhold at flat rates.
- Itemized deductions, tax credits other than the child tax credit, and income from other jobs or investments.
- Deductions claimed on your return rather than through withholding, such as the deductions for qualified tips and overtime pay.
- City-specific rates in states where local taxes vary widely.
Data sources
Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration. Each state page lists the official state sources used. Tax data was last reviewed 2026-09-16.