United States Salary Tax Calculator 2025-2026
Estimate your take-home pay after federal income tax, FICA taxes, and state taxes
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Frequently Asked Questions
How is federal income tax calculated?
Federal income tax is calculated using a progressive tax system with seven tax brackets ranging from 10% to 37%. Your income is taxed at different rates as it moves through these brackets.
What's the difference between traditional and Roth retirement accounts?
Traditional retirement accounts (like 401(k) and traditional IRA) use pre-tax dollars, reducing your taxable income now. Roth accounts use after-tax dollars, so withdrawals in retirement are tax-free.
Are state taxes included in this calculator?
Yes, you can select your state from the dropdown menu to include state income tax in your calculation. Some states have no income tax (like Texas and Florida), while others have varying tax rates.
How often should I update my tax withholdings?
You should review your tax withholdings whenever you experience a major life change (marriage, divorce, new child, new job) or at least once a year to ensure you're not overpaying or underpaying taxes.
Understanding Your Tax Calculation: A Comprehensive Guide
Introduction to US Income Tax System
The United States uses a progressive tax system for federal income taxes, meaning that higher income earners pay a higher percentage of their income in taxes. Understanding how this system works is essential for financial planning and ensuring you're not overpaying on your taxes.
For the 2025 tax year, there are seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The specific brackets vary based on your filing status (single, married filing jointly, married filing separately, or head of household).
Breaking Down the Tax Components
When you look at your paycheck, you'll notice several deductions. The main components are:
- Federal Income Tax: Based on your income and filing status
- Social Security Tax: 6.2% on income up to the taxable maximum ($168,600 in 2023, adjusted annually)
- Medicare Tax: 1.45% on all earnings, with an additional 0.9% for high-income earners
- State Income Tax: Varies by state, with some states having no income tax
How Retirement Contributions Affect Your Taxes
Contributing to retirement accounts can significantly impact your tax situation. Traditional 401(k) and IRA contributions are made with pre-tax dollars, reducing your taxable income for the year. For example, if you earn $60,000 and contribute $5,000 to a traditional 401(k), your taxable income becomes $55,000.
Roth retirement accounts work differently. Contributions are made with after-tax dollars, so they don't reduce your current taxable income. However, qualified withdrawals in retirement are completely tax-free.