How it works
Gross salary is not what lands in your bank account. Three buckets come out first: federal income tax, state income tax and FICA (Social Security plus Medicare, normally 7.65% for employees). Pre-tax deductions — 401(k), health premiums, HSA contributions — reduce the income subject to income tax but not FICA (with minor HSA exceptions). The engine subtracts pre-tax deductions, applies federal and state rates to the taxable remainder, charges FICA on gross, and reports annual and monthly take-home. On the defaults — $90,000 gross salary, 17% estimated federal effective rate, 5% state rate, 7.65% FICA, $6,000 pre-tax deductions — taxable income for income tax is $84,000. Federal tax is $14,280, state tax $4,200, FICA $6,885, and annual take-home is $64,635 ($5,386.25 per month). The federal rate should be your effective rate from the income tax calculator, not your marginal bracket — using 22% here would overstate withholding by thousands. Pre-tax retirement contributions trade today's take-home for tomorrow's balance: the $6,000 401(k) reduces taxable income by $6,000 but does not reduce FICA. IRS Publication 15-T governs withholding mechanics; this tool is the planning version that shows every lever. Pair with paycheck deductions calculator for itemised withholding and salary to hourly converter when comparing offers.
Formula
Taxable for income tax = gross − pre-tax deductions
Federal tax = taxable × federal rate / 100
State tax = taxable × state rate / 100
FICA = gross × FICA rate / 100
Take-home = gross − federal − state − FICA
Worked example — $90k gross · 17% fed · 5% state · 7.65% FICA · $6k pre-tax
Taxable = $84,000
Federal = $14,280
State = $4,200
FICA = $6,885
Annual take-home = $64,635 ($5,386.25/mo)
Tips
- Pull the federal rate from the income tax calculator for the same salary — effective rate, not marginal.
- Compare job offers in take-home terms; a higher gross in a high-tax state can net less.
- Maxing pre-tax 401(k) cuts taxable income at your marginal rate but shrinks today's paycheck — model both.
- Set state rate to 0% if you live in TX, FL, WA or other no-income-tax states.
- Update after every raise — a $5,000 increase is not $5,000 net; it is gross minus marginal tax, state and FICA.
Frequently asked questions
- What is take-home pay on $90,000 with the defaults?
- $64,635 per year, or $5,386.25 per month. That assumes 17% federal on $84,000 taxable (after $6,000 pre-tax), 5% state on the same taxable base, and 7.65% FICA on full gross.
- Which federal rate should I enter?
- Your effective federal rate — total federal tax divided by gross income. For $90,000 the income tax calculator returns about 12–17% depending on deductions; 17% is a reasonable planning estimate with modest pre-tax contributions.
- Why is FICA calculated on gross, not taxable income?
- Social Security and Medicare taxes apply to gross wages before most pre-tax deductions. A $6,000 401(k) contribution reduces income tax but not the 7.65% FICA on $90,000 ($6,885).
- Are health insurance premiums included?
- Only if you enter them in pre-tax deductions. Employer-paid premiums do not appear in your gross; your share of premiums withheld from paycheck should be included there.
- How accurate is this versus my actual paycheck?
- Within a few percent for most W-2 employees. It omits state-specific disability taxes, local income tax and exact withholding tables — use it for planning and offer comparison, then confirm with your pay stub.