🇺🇸 US Federal Paycheck Calculator
Calculate your take home pay after federal, state & local taxes
Last updated on Aug 31 2021
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United States federal income tax
All residents and citizens in the USA are subjected to income taxes. Residents and citizens are taxed on worldwide income (working overseas, etc), while nonresidents are taxed only on income within the jurisdiction.
A fiscal year is different for the federal and state. A federal fiscal year is the 12-months period beginning October 01 and ending September 30 the following year. The fiscal year 2021 will starts on Oct 01 2020 and ends on Sep 30 2021. The state fiscal year is also 12 months but it differs from state to state. Some states follow the federal fiscal year, some states start on July 01 and end on Jun 30.
Similar to the fiscal year, federal income tax rates are different from each state. Federal taxes are progressive (higher rates on higher levels of income), while states have either a progressive tax system or a flat tax rate on all income.
The income tax rate varies from state to state. There are 8 states which don’t have income tax and 1 state (New Hampshire) that has no wage income tax.
It is also worth noting that the recent Tax Cuts and Jobs Act (TCJA) of 2017 made several significant changes to the individual income tax across the board. If you want to understand the changes in detail, refer to this Investopedia article.
Calculate income tax in 5 steps
There are five main steps to work out your income tax (federal & state) liability or refunds. First, you need to determine your filing status to understand your tax bracket.
Step 1 – Filing status
There is 4 main filing status:
- Single
- Married, Filing Jointly or Widow(er)
- Married, Filing Separately
- Head of Household
Your marital status and whether you have any dependent will determine your filing status.
For example, if you are single and have a child, then you should file as ‘Head of Household’.
If you are married but preferred to file separately from your partner (highly inadvisable), then you will file as ‘Married, Filing Separately’.
Refer to IRS to understand more.
Step 2 – Adjusted gross income
The second step is to figure out your adjusted gross income.
The formula is:
Total annual income – Adjustments = Adjusted gross income
Income means money received for pretty much any reason such as wage, rental income, side hustle, unemployment benefits, etc. You just need to add them up to determine your annual income. If you’re paid hourly, you will need to multiple it with your total annual hours.
Adjustments are also known as above-the-line deductions.There are 2 types of deductions: above-the-line & post-tax (more in the next step).
Some of the adjustments are:
- Student loan interest
- Contributions to a retirement account (401k, IRA)
- Health savings account deduction
- Educator expenses
- Moving expenses for a job
- College tuition and fees
For the complete breakdown of the various type of above-the-line deductions or adjustments, refer to this article from thebalance.com.
Step 3 – Taxable income
Now you need to figure out your taxable income.
The formula is:
Adjusted gross income – (Post-tax deductions + Exemptions) = Taxable income
For post-tax deductions, you can choose to either take the standard deduction amount or itemize your deductions. If your itemized deductions are less than the standard deduction, just claim the standard amount 🙂
Some of the deductions you can itemize are:
- Charitable donations
- Home mortgage interest
Exemptions have been eliminated from Federal income tax since the Tax Cuts and Jobs Act (TCJA) was implemented in 2018. But some states still have exemptions in their income tax calculation.
You might be confused with deductions and exemptions, so the following is a quote from Zacks.com:
Tax deductions are items you claim to reduce your tax liability while exemptions refer to the people you claim to reduce tax liability, such as dependents.
Step 4 – Tax liability
This step is rather straight forward. You just need to understand which tax bracket you belong to based on your taxable income. If your filing status is ‘Married, Filing Jointly’ or ‘Widow(er)’, you need to combine your taxable income with your partner’s.
The formula to calculate tax liability:
Taxable income × Tax rate = Tax liability
Step 5 – Owe money or refunds
Once you have worked out your tax liability, you need to understand whether it is more than your tax credits and withheld.
If your tax liability is more than your tax credits and withheld, then you need to pay IRS or your state the difference.
If your tax credits and withheld is more than your tax liability, then IRS or your state owes you the difference.
The formula for tax liability more than refunds:
Tax liability – (Credits + Withheld) = What you owe
The formula for tax liability less than refunds:
(Credits + Withheld) – Tax liability = Tax refunds
You need to do these steps separately for federal, state and local income taxes.
For visual explanations of the above steps, you can refer to Youtube videos from Ladder Up, MoneyCoach or Edspira.
Federal Insurance Contributions Act (FICA)
Also known as ‘paycheck tax’ or ‘payroll tax’, these taxes are taken from your paycheck directly and are used to fund social security and medicare.
For example, in the fiscal year 2020 Social Security tax is 6.2% for employee and 1.45% for Medicare tax.
If your monthly paycheck is $6000, $372 goes to Social Security and $87 goes to Medicare, leaving you with $6000 – $372 – $87 = $5541
Social Security
| Fiscal year | Employment status | Gross income | Rate |
|---|---|---|---|
| 2021 | Employer | Up to $142,800 | 6.20% |
| Employee | 6.20% | ||
| Self-employed | 12.40% | ||
| 2020 | Employer | Up to $137,700 | 6.20% |
| Employee | 6.20% | ||
| Self-employed | 12.40% |
Medicare
| Fiscal year | Employment status | Filing status | Gross income | Rate |
|---|---|---|---|---|
| 2021 2020 |
Employer | Single & Head of Household | Up to $200,000 | 1.45% |
| Married Jointly | Up to $250,000 | |||
| Married Separately | Up to $125,000 | |||
| Single & Head of Household | $200,000 and over | 2.35% | ||
| Married Jointly | $250,000 and over | |||
| Married Separately | $125,000 and over | |||
| Employee | Single & Head of Household | Up to $200,000 | 1.45% | |
| Married Jointly | Up to $250,000 | |||
| Married Separately | Up to $125,000 | |||
| Single & Head of Household | $200,000 and over | 2.35% | ||
| Married Jointly | $250,000 and over | |||
| Married Separately | $125,000 and over | |||
| Self-employed | Single & Head of Household | Up to $200,000 | 2.90% | |
| Married Jointly | Up to $250,000 | |||
| Married Separately | Up to $125,000 | |||
| Single & Head of Household | $200,000 and over | 3.80% | ||
| Married Jointly | $250,000 and over | |||
| Married Separately | $125,000 and over |
Income tax brackets
Every year, IRS adjusts some tax provisions for inflation. This means that your federal tax bracket varies from year to year and you need to check the latest data before you do your tax return.
For the latest on federal income tax brackets, you can refer to Tax Foundation.
The income tax rate varies from state to state. There are 8 states which don’t have income tax and 1 state (New Hampshire) that has no wage income tax.
| Fiscal year | Filing status | Taxable income | Rate |
|---|---|---|---|
| 2021 | Single | $0 – $9,950 | 10% |
| $9,951 – $40,525 | 12% | ||
| $40,526 – $86,375 | 22% | ||
| $86,376 – $164,925 | 24% | ||
| $164,926 – $209,425 | 32% | ||
| $209,426 – $523,600 | 35% | ||
| $523,601 and over | 37% | ||
| Married, Filing Jointly or Widow(er) | $0 – $19,900 | 10% | |
| $19,901 – $81,050 | 12% | ||
| $81,051 – $171,050 | 22% | ||
| $172,751 – $329,850 | 24% | ||
| $329,851 – $418,850 | 32% | ||
| $418,851 – $628,300 | 35% | ||
| $628,301 and over | 37% | ||
| Married, Filing Separately | $0 – $9,950 | 10% | |
| $9,951 – $40,525 | 12% | ||
| $40,526 – $86,375 | 22% | ||
| $86,376 – $164,925 | 24% | ||
| $164,926 – $209,425 | 32% | ||
| $209,426 – $314,150 | 35% | ||
| $314,151 and over | 37% | ||
| Head of Household | $0 – $14,200 | 10% | |
| $14,201 – $54,200 | 12% | ||
| $54,201 – $86,350 | 22% | ||
| $86,351 – $164,900 | 24% | ||
| $164,901 – $209,400 | 32% | ||
| $209,401 – $523,600 | 35% | ||
| $523,601 and over | 37% | ||
| 2020 | Single | $0 – $9,875 | 10% |
| $9,876 – $40,125 | 12% | ||
| $40,126 – $85,525 | 22% | ||
| $85,526 – $163,300 | 24% | ||
| $163,301 – $207,350 | 32% | ||
| $207,351 – $518,400 | 35% | ||
| $518,401 and over | 37% | ||
| Married, Filing Jointly or Widow(er) | $0 – $19,750 | 10% | |
| $19,751 – $80,250 | 12% | ||
| $80,251 – $171,050 | 22% | ||
| $171,051 – $326,600 | 24% | ||
| $326,601 – $414,700 | 32% | ||
| $414,701 – $622,050 | 35% | ||
| $622,051 and over | 37% | ||
| Married, Filing Separately | $0 – $9,875 | 10% | |
| $9,876 – $40,125 | 12% | ||
| $40,126 – $85,525 | 22% | ||
| $85,526 – $163,300 | 24% | ||
| $163,301 – $207,350 | 32% | ||
| $207,351 – $311,025 | 35% | ||
| $311,026 and over | 37% | ||
| Head of Household | $0 – $14,100 | 10% | |
| $14,101 – $53,700 | 12% | ||
| $53,701 – $85,500 | 22% | ||
| $85,501 – $163,300 | 24% | ||
| $163,301 – $207,350 | 32% | ||
| $207,351 – $518,400 | 35% | ||
| $518,401 and over | 37% |
Deductions
Also known as post-tax deductions, you can choose to either take the standard deduction amount or itemize your deductions. If your itemized deductions are less than the standard deduction, just claim the standard amount 🙂
Some of the deductions you can itemize are:
- Charitable donations
- Home mortgage interest
For a list of itemizable deductions, refer to Dough Roller’s ultimate list.
| Fiscal year | Filing status | Standard deduction amount |
|---|---|---|
| 2021 | Single | $12,550 |
| Married, Filing Jointly | $25,100 | |
| Married, Filing Separately | $12,550 | |
| Head of Household | $18,800 | |
| 2020 | Single | $12,200 |
| Married, Filing Jointly | $24,400 | |
| Married, Filing Separately | $12,200 | |
| Head of Household | $18,350 |
Earned Income Tax Credit (EITC)
EITC is calculated based on adjusted gross income. Its main purpose is to offsets federal payroll and income taxes for those with lower income. Some states do have EITC which is usually based on a percentage of federal EITC.
For more information, refer to the Center on Budget and Policy Priorities.
| Fiscal year | Filing status | No. of child | Maximum credit amount | Comment |
|---|---|---|---|---|
| 2021 | Single Married, Filing Separately Head of Household |
0 | $538 | Phase-in rate – 15.3% Phase-in ends – $9,820 Phase-out begins – $11,610 Phase-out rate – 15.3% Phase-out ends – $21,427 |
| 1 | $3,584 | Phase-in rate – 34% Phase-in ends – $10,640 Phase-out begins – $19,520 Phase-out rate – 15.98% Phase-out ends – $42,158 |
||
| 2 | $5,920 | Phase-in rate – 40% Phase-in ends – $14,950 Phase-out begins – $19,520 Phase-out rate – 21.06% Phase-out ends – $47,915 |
||
| 3 or more | $6,660 | Phase-in rate – 45% Phase-in ends – $14,950 Phase-out begins – $19,520 Phase-out rate – 21.06% Phase-out ends – $51,464 |
||
| Married, Filing Jointly | 0 | $538 | Phase-in rate – 15.3% Phase-in ends – $9,820 Phase-out begins – $11,610 Phase-out rate – 15.3% Phase-out ends – $21,427 |
|
| 1 | $3,584 | Phase-in rate – 34% Phase-in ends – $10,640 Phase-out begins – $19,520 Phase-out rate – 15.98% Phase-out ends – $42,158 |
||
| 2 | $5,920 | Phase-in rate – 40% Phase-in ends – $14,950 Phase-out begins – $19,520 Phase-out rate – 21.06% Phase-out ends – $47,915 |
||
| 3 or more | $6,660 | Phase-in rate – 45% Phase-in ends – $14,950 Phase-out begins – $19,520 Phase-out rate – 21.06% Phase-out ends – $51,464 |
||
| 2020 | Single Married, Filing Separately Head of Household |
0 | $538 | Phase-in rate – 7.65% Phase-in ends – $7,030 Phase-out begins – $8,790 Phase-out rate – 7.65% Phase-out ends – $15,820 |
| 1 | $3,584 | Phase-in rate – 34% Phase-in ends – $10,540 Phase-out begins – $19,330 Phase-out rate – 15.98% Phase-out ends – $41,756 |
||
| 2 | $5,920 | Phase-in rate – 40% Phase-in ends – $14,800 Phase-out begins – $19,330 Phase-out rate – 21.06% Phase-out ends – $47,440 |
||
| 3 or more | $6,660 | Phase-in rate – 45% Phase-in ends – $14,800 Phase-out begins – $19,330 Phase-out rate – 21.06% Phase-out ends – $50,954 |
||
| Married, Filing Jointly | 0 | $538 | Phase-in rate – 7.65% Phase-in ends – $7,030 Phase-out begins – $14,680 Phase-out rate – 7.65% Phase-out ends – $21,710 |
|
| 1 | $3,584 | Phase-in rate – 34% Phase-in ends – $10,540 Phase-out begins – $25,220 Phase-out rate – 15.98% Phase-out ends – $47,646 |
||
| 2 | $5,920 | Phase-in rate – 40% Phase-in ends – $14,800 Phase-out begins – $25,220 Phase-out rate – 21.06% Phase-out ends – $53,330 |
||
| 3 or more | $6,660 | Phase-in rate – 45% Phase-in ends – $14,800 Phase-out begins – $25,220 Phase-out rate – 21.06% Phase-out ends – $56,844 |
Child Tax Credit (CTC)
This is a ‘refundable’ credit, meaning you can get up a certain amount of money even if your tax bill is $0. The only catch is that you must claim the credit on your tax return to get it. Each state has different child tax credits.
For more information, refer to Tax Credits for Workers and Families.
| Fiscal year | Filing status | Amount per dependent | Refundable | Comment |
|---|---|---|---|---|
| 2021 2020 |
Single Married, Filing Separately Head of Household |
$2,000 per child under 17 | Up to $1,400 | Phase-out begins at $200,000 and end at $240,000 Earned income threshold to qualify – $2500 |
| Married, Filing Jointly | Phase-out begins at $400,000 and end at $440,000 Earned income threshold to qualify – $2500 |
Credit for Other Dependents (ODC)
ODC is for taxpayers who have dependents who don’t qualify for the Child Tax Credit.
Each dependent must meet the following conditions:
- age 17 or older.
- have individual taxpayer identification numbers.
- dependent’s parents or other qualifying relatives supported by the taxpayer
- living with the taxpayer who isn’t related to the taxpayer
ODC is a federal only tax and does not have a state counterpart.
For more information, refer to IRS.
| Fiscal year | Filing status | Amount per dependent | Refundable |
|---|---|---|---|
| 2021 2020 |
Any | $500 per dependent | No |
FAQs
How do I figure out how much my paycheck will be?
Step 1: Total annual income – Adjustments = Adjusted gross income
Step 2: Adjusted gross income – (Post-tax deductions + Exemptions) = Taxable income
Step 3: Taxable income × Tax rate = Tax liability
Step 4: Tax liability – (Credits + Withheld) = What you owe IRS
How much is a paycheck on 40000 salary?
For single filer, you will receive $2820.42 every month after federal tax liability. For married filed joinly with no dependent, the monthly paycheck is $2954.17 after federal tax liability.
How much is 75k a paycheck?
Paycheck after federal tax liability for single filer:
- Monthly - $4981.25
- Bi-weekly - $2299.04
- Weekly - $1149.52