Finance
Take-home pay calculator
What actually lands in your account, once pre-tax deductions, tax and post-tax deductions have each taken their turn.
The order the deductions happen in
Net pay is not gross minus one tax. It is a sequence, and the order changes the answer:
- Pre-tax deductions come off first — workplace pension or 401(k) contributions, health premiums under a salary-sacrifice arrangement, commuter benefits. These reduce the income your tax is calculated on.
- Income tax is charged on what remains.
- Payroll tax is usually charged on gross, before pre-tax deductions. In the US, Social Security and Medicare (FICA) total 7.65% for employees and are not reduced by 401(k) contributions.
- Post-tax deductions come off the end — union dues, Roth contributions, wage garnishments, charitable giving.
That third point catches people out. Putting money into a 401(k) saves income tax but not FICA, so a dollar contributed does not save you the full marginal rate.
Why this asks for your tax rate
Most paycheck calculators guess your tax from a country and a filing status. That guess quietly goes stale every year when bands move, and it is wrong from the start if you have other income, a second job, student loan repayments, or you live somewhere with local income tax on top.
This one asks. If you have a recent payslip, the honest input is your effective rate — total income tax divided by taxable pay — not your marginal band. Someone in a 40% band rarely pays 40% of everything, because the lower bands are taxed at lower rates first.
Getting a realistic number
Take your most recent payslip and work backwards. Divide the income tax line by the taxable pay line and you have your effective rate to put in here. Do the same for the payroll tax line. Those two numbers will predict your future paychecks far better than any bracket table, because they already contain whatever allowances and adjustments apply to you.
One thing to watch: pay frequency affects the size of each cheque but not the annual total. Fortnightly pay gives 26 cheques, not 24, so a fortnightly cheque is smaller than half a monthly one. Two months a year contain three fortnightly paydays, which is where the feeling of an extra paycheck comes from.
What this deliberately does not model
Progressive bands, personal allowances, tax credits, national insurance thresholds, state and city taxes, and year-to-date caps such as the Social Security wage base. Those are jurisdiction-specific and change annually. If you need a legally precise figure — for a mortgage application or a tax return — use your revenue authority's own calculator or ask your payroll department.
Common questions
Should I enter my marginal or effective tax rate?
Effective. Marginal is the rate on your next pound or dollar; effective is what you actually pay across all your income, and it is always lower under a progressive system. Divide the tax line on a recent payslip by the taxable pay line to get it.
Why is payroll tax charged on gross rather than taxable pay?
Because most payroll taxes are levied on earnings before voluntary pre-tax deductions. In the US, 401(k) contributions reduce income tax but not FICA. This calculator follows that convention, which is why the two taxes use different bases.
My fortnightly pay does not match gross divided by 24. Why?
Fortnightly pay is 26 cheques a year, not 24. Divide by 26. Two months each year contain three paydays, which is the same annual money arriving in a different rhythm.
Does this work outside the United States?
Yes. Nothing here is US-specific except the FICA hint on the payroll tax field. Enter your own rates — National Insurance, superannuation levies, social charges — and the arithmetic is the same.