Paycheck Calculator

What This Tool Does

This calculator estimates your take-home pay from either an hourly rate or annual salary. For hourly workers, it calculates regular pay plus overtime at 1.5 times the base rate. For salaried employees, it divides annual compensation by the number of pay periods. Then it subtracts estimated taxes and fixed deductions like health insurance or retirement contributions to show net pay. Use it to compare job offers, plan your budget, or verify that your paycheck aligns with expectations.

How It Works: Gross to Net

The calculation begins with gross pay — the total before any deductions. For an hourly worker earning $25 per hour who works 40 regular hours and 5 overtime hours, gross pay equals ($25 × 40) + ($25 × 1.5 × 5) = $1,000 + $187.50 = $1,187.50. For a salaried worker earning $52,000 per year paid biweekly, gross pay per check is $52,000 ÷ 26 = $2,000.

Next, taxes are applied. Federal income tax uses progressive brackets from 10% to 37%. FICA taxes are a flat 7.65% (6.2% Social Security + 1.45% Medicare). State taxes vary widely — from zero in states like Texas and Florida to over 10% in California. This calculator uses a single estimated tax rate for simplicity. For precise withholding, consult your pay stub or use the IRS Tax Withholding Estimator.

Worked Example: Comparing Two Job Offers

Imagine you have two offers. Job A pays $28 per hour with an estimated 25% total tax rate. Working 40 hours with no overtime gives gross pay of $1,120 and net pay of $840 per week. Job B offers a $58,000 annual salary paid biweekly with the same 25% tax rate. Each biweekly check is $2,231 gross and $1,673 net. Over a full year, Job A yields $43,680 net while Job B yields $43,498 net — nearly identical, but Job A offers overtime potential while Job B provides more predictable income.

Paycheck Deductions Explained

When to Use This Calculator

Budget planning: Knowing your net pay helps you build a realistic monthly budget. Financial advisors recommend the 50/30/20 rule: 50% of net pay for needs, 30% for wants, and 20% for savings and debt repayment. Use this calculator to determine your actual monthly income after taxes before allocating expenses.

Job offer comparison: When comparing hourly versus salaried positions, convert both to net pay for a fair comparison. Consider overtime potential, benefits value, and commute costs. A higher gross salary may not mean higher net pay if the job is in a high-tax state or has expensive health insurance premiums.

Side income estimation: Freelancers and gig workers can estimate quarterly tax payments by projecting annual income and applying estimated tax rates. Use this calculator for each client or gig to track whether you are setting aside enough for tax season. For more detailed projections, try our Compound Interest Calculator to see how extra income grows when invested.

Frequently Asked Questions

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