Step 1: start from gross pay
Gross pay is your salary before any deduction: $85,000 a year. Subtract pre-tax benefits such as a traditional 401(k), HSA or health premiums to get your taxable wages. In this example there are none.
Step 2: subtract the standard deduction
For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.
$85,000 − $16,100 = $68,900 of taxable income.
Step 3: apply the federal brackets
Each slice of taxable income is taxed at its own rate:
- 10% × $12,400 = $1,240
- 12% × $38,000 = $4,560
- 22% × $18,500 = $4,070
Federal income tax = $9,870.
Step 4: add Social Security and Medicare
- Social Security: 6.2% × $85,000 = $5,270
- Medicare: 1.45% × $85,000 = $1,233
Step 5: add state and local taxes
Illinois charges a flat 4.95% after a $2,925 exemption: $82,075 × 4.95% = $4,063.
Step 6: put it together
| Item | Per year | Per month | Bi-weekly |
|---|---|---|---|
| Gross pay | $85,000 | $7,083 | $3,269 |
| Federal income tax | −$9,870 | −$823 | −$380 |
| FICA | −$6,503 | −$542 | −$250 |
| Illinois income tax | −$4,063 | −$339 | −$156 |
| Take-home pay | $64,565 | $5,380 | $2,483 |
The same salary, different situations
| Situation | Federal tax | Take-home pay | Per month |
|---|---|---|---|
| Single | $9,870 | $64,565 | $5,380 |
| Married filing jointly (one income) | $5,840 | $68,740 | $5,728 |
| Single, 6% traditional 401(k) | $8,748 | $60,839 | $5,070 |
With a 401(k), take-home pay is lower but $5,100 goes into retirement savings, and taxes fall by $1,374.
Mistakes to avoid
- Applying your top bracket rate to your whole income. Only the slice above each threshold is taxed at the higher rate.
- Forgetting FICA. Social Security and Medicare often cost more than federal income tax on middle incomes.
- Using the wrong state. You generally owe tax where you live, and sometimes where you work.
- Ignoring pre-tax benefits, which lower taxable income before the brackets apply.
Frequently asked questions
What is the formula for take-home pay?
Gross pay minus federal income tax, Social Security (6.2%), Medicare (1.45%), state and local income tax, and any benefit deductions.
Is take-home pay the same as net pay?
Yes. Both mean the amount you receive after all deductions.
How do I calculate take-home pay per paycheck?
Divide the yearly take-home pay by your number of pay periods: 26 for bi-weekly, 24 for semi-monthly, 12 for monthly.
Should I use my marginal or effective tax rate to estimate take-home pay?
Use the effective (average) rate for your whole salary, and the marginal rate to estimate what you keep from a raise.
Figures use 2026 IRS federal brackets, the standard deduction, Social Security and Medicare rates, and each state's income tax rules for a W-2 employee. Read our methodology. Last updated September 25, 2026. Estimates for information only, not tax advice.