How to Calculate Your Take-Home Pay: Gross vs. Net Pay Explained

You accepted a job at $60,000 a year, but the number that hits your bank account every two weeks looks nothing like $60,000 ÷ 26. The gap between what you earn and what you keep is the difference between gross pay and net pay, and once you understand the handful of deductions in between, you can calculate your take-home pay for any salary, in any state, by hand.

This guide walks through the calculation one deduction at a time, then runs a complete example from gross salary down to the final number on the check.

Gross Pay vs. Net Pay

Gross pay is your total compensation before anything is taken out. For a salaried employee it's your annual salary divided by the number of pay periods. For an hourly employee it's hours worked × hourly rate, plus any overtime.

Net pay, your take-home pay, is what remains after every deduction. The journey from one to the other always follows the same order:

• Gross pay
• − Pre-tax deductions (401(k), health insurance, HSA)
• − Federal income tax withholding
• − Social Security & Medicare (FICA)
• − State and local income tax
• − Post-tax deductions (Roth 401(k), garnishments, union dues)
• = Net take-home pay

Step 1: Start With Gross Pay

Find your gross pay for the period you're calculating. If you're paid a $60,000 salary on a biweekly schedule (26 paychecks a year), your gross pay per check is:

$60,000 ÷ 26 = $2,307.69 per paycheck

Common pay schedules and their period counts:

Pay frequency	Paychecks per year	Gross per check on $60,000
Weekly	52	$1,153.85
Biweekly	26	$2,307.69
Semi-monthly	24	$2,500.00
Monthly	12	$5,000.00

Hourly workers calculate gross differently: multiply hours by rate, and add overtime at 1.5× for hours over 40 in a workweek. If you're hourly, see our companion guide on how to calculate overtime pay.

Step 2: Subtract Pre-Tax Deductions

Pre-tax (or "above-the-line") deductions come out of gross pay before income tax is figured, so they reduce both your take-home pay and your taxable income. The most common ones:

• Traditional 401(k) or 403(b) contributions, whatever percentage you elected.
• Health, dental, and vision insurance premiums, your share of the employer-sponsored plan.
• Health Savings Account (HSA) or Flexible Spending Account (FSA) contributions.
• Commuter and dependent-care benefits, where offered.

Say you contribute 5% to a traditional 401(k) and pay $120 per paycheck toward health insurance. On a $2,307.69 gross check:

• 401(k): 5% × $2,307.69 = $115.38
• Health insurance: $120.00
• Taxable wages after pre-tax deductions: $2,307.69 − $115.38 − $120.00 = $2,072.31

Step 3: Federal Income Tax Withholding

Federal income tax withholding is the hardest piece to calculate by hand because it depends on your Form W-4, your filing status, and the IRS percentage-method tables in Publication 15-T. Employers don't apply your marginal tax bracket directly, they annualize each paycheck, run it through the withholding tables, and divide back down.

For a rough manual estimate, you can:

1. Annualize taxable wages (after pre-tax deductions): $2,072.31 × 26 = $53,880.06
2. Subtract the standard deduction for your filing status. The 2026 standard deduction is $16,100 for single filers, $32,200 for married filing jointly, and $24,150 for heads of household (IRS Rev. Proc. 2025-32).
3. Apply the federal tax brackets to the remainder to get annual tax.
4. Divide by the number of pay periods.

For our single-filer example, federal withholding works out to roughly $180 per paycheck. Because the brackets and standard deduction change yearly, this is exactly the kind of figure a calculator handles more reliably than hand math.

Step 4: Social Security & Medicare (FICA)

FICA is the easiest deduction to calculate because it's a flat rate. For employees:

Tax	Employee rate	Applies to
Social Security	6.2%	Wages up to the annual wage base (verify current cap)
Medicare	1.45%	All wages (no cap)
Combined FICA	7.65%	—

FICA is calculated on gross pay minus only the deductions that are FICA-exempt (typically Section 125 health premiums), not on your 401(k)-reduced wages. Using gross of $2,307.69 minus $120 health insurance = $2,187.69:

• Social Security: 6.2% × $2,187.69 = $135.64
• Medicare: 1.45% × $2,187.69 = $31.72

Step 5: State & Local Income Tax

State income tax varies enormously. Nine states have no income tax at all (including Texas, Florida, and Washington), some use a flat rate, and others use graduated brackets like the federal system. A handful of cities and counties add local income taxes on top.

For a state with a flat 5% income tax applied to wages after pre-tax deductions ($2,072.31):

5% × $2,072.31 = $103.62 per paycheck

If you live in a no-tax state, this line is simply $0, which is why the same salary yields noticeably different take-home pay depending on where you live. See our state income tax guide for current rates.

Step 6: Post-Tax Deductions

Finally, subtract anything that comes out after taxes:

• Roth 401(k) or Roth IRA contributions (taxed now, tax-free later).
• Wage garnishments for child support, defaulted loans, or court judgments.
• Union dues, life insurance above the tax-free threshold, and charitable payroll giving.

For our example, assume no post-tax deductions, so this line is $0.

A Full Worked Example

Here's the complete calculation for our $60,000 single filer, paid biweekly, contributing 5% to a traditional 401(k), paying $120 for health insurance, in a state with a flat 5% income tax:

Line	Amount
Gross pay (biweekly)	$2,307.69
− Traditional 401(k), 5%	−$115.38
− Health insurance	−$120.00
− Federal income tax withholding	−$180.00
− Social Security (6.2%)	−$135.64
− Medicare (1.45%)	−$31.72
− State income tax (5%)	−$103.62
Net take-home pay	$1,621.33

So a $60,000 salary delivers about $1,621 every two weeks, or roughly $42,150 a year in take-home pay after retirement savings, benefits, and taxes, about 70% of gross. Your own percentage will shift with your W-4, state, benefit elections, and contribution rate.

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