How to Calculate Net Pay From Gross Pay (With Examples)

Net pay is the money that actually reaches your bank account. Gross pay is what you earned before deductions. The formula is simple; the details are where people get stuck.

The formula

Net pay = gross pay − pre-tax deductions − federal income tax − state income tax − Social Security − Medicare − other deductions

Pre-tax deductions include traditional 401(k) contributions, HSA contributions, and health insurance premiums. They lower taxable income, but they are not all treated the same: a traditional 401(k) usually reduces income tax but not FICA, while a Section 125 health plan usually reduces both.

Example: $60,000 salary paid biweekly

Gross pay per biweekly check: $60,000 ÷ 26 = $2,307.69.

• Federal income tax: about $193.08 per check (varies with your W-4).
• Social Security: 6.2% = $143.08.
• Medicare: 1.45% = $33.46.
• State income tax: $0 in Texas, roughly $69.33 per check in California.

In Texas, net pay is roughly $1,938.08 per check. In California, it is roughly $1,868.75. Same salary, different state, different bank deposit.

Common mistakes

• Using your marginal rate on all income. Only the income in each bracket is taxed at that rate.
• Forgetting FICA. Social Security and Medicare are separate from income tax and apply to most wages.
• Ignoring pre-tax deductions. A 401(k) contribution lowers taxable income but also lowers take-home pay today.
• Treating an estimate as withholding. Your employer's payroll system uses your W-4 and its own tables; a calculator is a planning tool.

Do it in one step

Our paycheck calculator does the full calculation for 2026, including federal tax, FICA, and state tax. Enter your salary, filing status, state, and any 401(k) or health contributions, and it shows net pay per year, month, biweekly, week, and hour.