How to Calculate Your Paycheck: Formula & Example 2026

What a paycheck calculation is

A paycheck calculation turns your gross pay into the net pay that lands in your bank account. Between the two sit federal withholding, Social Security, and Medicare, plus anything else your employer takes out, like state tax or a 401(k) contribution. The order is simple: annualise, subtract the standard deduction, run the brackets, then divide back down to one paycheck. Every figure here is checked against the paycheck calculator.

The paycheck formula

The formula in one line: net pay = gross pay − federal withholding − Social Security − Medicare − state tax − pre-tax deductions. Federal withholding is the only piece that needs a table: taxable income = annual gross − standard deduction, then the 2026 brackets apply — 10% to $12,400, 12% to $50,400, 22% to $105,700, and higher rates above, for single filers. Social Security is a flat 6.2% of gross; Medicare is a flat 1.45%.

Step 1: Start with your gross pay for the period

Start with the gross pay for one pay period. This guide uses $3,000 every two weeks — a $78,000 salary paid biweekly. Paid weekly, use one week’s gross; paid monthly, one month’s. Overtime, tips, and bonuses belong in this number too, as wages in the period you receive them.

Step 2: Work out your annual pay (gross × pay periods)

Multiply the gross by the pay periods in the year: 52 weekly, 26 biweekly, 24 semimonthly, 12 monthly. Here, $3,000 × 26 is $78,000 a year. The brackets are annual, so your employer works out the year’s tax first, then divides it back down to one paycheck.

Step 3: Subtract the standard deduction to get taxable income

Subtract the 2026 standard deduction from your annual pay. For a single filer it is $16,100, so $78,000 minus $16,100 gives $61,900 of taxable income. Filing jointly, the deduction is $32,200, so the same pay gives $45,800. Only this amount is taxed.

Step 4: Apply the 2026 tax brackets to get annual federal tax

Run the taxable income through the 2026 brackets, taxing each slice at its own rate. On $61,900: 10% of the first $12,400 is $1,240.00; 12% of the next $38,000 is $4,560.00; 22% of the remaining $11,500 is $2,530.00. Added up, the annual federal tax is $8,330.00. Your whole income is not taxed at 22%; only the slice above $50,400 is.

Step 5: Divide by pay periods and subtract Social Security and Medicare

Divide the annual federal tax by the pay periods: $8,330.00 ÷ 26 is $320.38 a paycheck. Then subtract Social Security at 6.2% of gross — $186.00 on $3,000 — and Medicare at 1.45% — $43.50. That leaves $3,000.00 − $320.38 − $186.00 − $43.50 = $2,450.12, before state tax and any 401(k). The effective tax rate is 18.33%.

Step 6: Subtract state tax and pre-tax deductions for your net pay

Last, subtract state tax and any pre-tax deductions, such as a 401(k) contribution. With no state tax and no 401(k), the net pay is the $2,450.12 from step 5. At a 5% state tax rate, state tax is $150.00 and the net falls to $2,300.12. Annual take-home is the unrounded net pay × 26, which is $63,703.00 — the displayed net × 26 is $63,703.12, because the displayed net is rounded to the cent.

Worked example

Put the six steps together for a single filer paid $3,000 biweekly. Gross $3,000.00; annual pay $78,000.00; standard deduction $16,100.00; taxable income $61,900.00; annual federal tax $8,330.00, or $320.38 a paycheck; Social Security $186.00; Medicare $43.50; net pay $2,450.12; annual take-home $63,703.00. Note that totals are computed from unrounded values, so rounded parts may differ by a cent from their rounded sum.

Paid monthly?

The same $78,000 salary paid monthly is $6,500 a paycheck. Taxable income is still $61,900 and annual federal tax is still $8,330.00. Over 12 pay periods, federal withholding is $694.17; Social Security is $403.00 and Medicare is $94.25, leaving a net of $5,308.58. Annual take-home is still $63,703.00 — pay frequency changes the size of each check, not the year’s total.

Filing jointly?

Married filing jointly, the deduction doubles to $32,200, so taxable income falls to $45,800. The tax is 10% of the first $24,800 ($2,480.00) plus 12% of the next $21,000 ($2,520.00): $5,000.00 a year, or $192.31 a paycheck. Social Security and Medicare are unchanged, so the net is $2,578.19 — $128.07 more per paycheck than filing single.

Adding a 401(k)?

A $300.00 401(k) contribution per paycheck is $7,800.00 a year, and it comes off taxable income before the brackets: $78,000 − $7,800 − $16,100 is $54,100. The annual federal tax falls to $6,614.00, or $254.38 a paycheck — $66.00 less tax. The net is $3,000.00 − $254.38 − $186.00 − $43.50 − $300.00 = $2,216.12. The 401(k) lowers your tax, not your Social Security or Medicare, which are still charged on the full $3,000 gross.

Working backwards

The calculation also runs in reverse. For a $2,500.00 net — biweekly, single, no 401(k) or state tax — you need gross pay of $3,070.91. One dollar less, $3,069.91, gives a net of $2,499.30; one dollar more gives $2,500.70. Two more reverses: a 401(k) of $192.46 per paycheck brings the net to exactly $2,300.00 ($1 less gives $2,300.78), and a 401(k) of $634.62 brings federal withholding to exactly $200.00 ($1 less gives $200.12). The last one is not a simple marginal-rate calculation — the 401(k) pushes taxable income below the 22% bracket.

What the calculation leaves out

Five things this calculation leaves out. First, your employer uses your W-4 and the IRS percentage method, not this formula, so real withholding can differ by a few dollars. Second, state tax here is a flat rate you enter; your state may use its own brackets. Third, bonuses and overtime are taxed the same way here, but employers often withhold on them at the 22% supplemental rate. Fourth, Social Security stops once year-to-date wages pass the $184,500 wage base, so the $186.00 here is the early-year figure. Fifth, the calculation assumes the same gross every paycheck. For the full bracket table, see the 2026 federal tax brackets page.

What to do next

Run your own numbers through the paycheck calculator: try your gross pay, pay frequency, filing status, and 401(k), then work backwards to see what gross pay your take-home goal needs.