Paystub Calculator: How to Calculate Your Take Home Pay
Payday is always exciting, but do you ever find yourself unsure of how much your paycheck will actually be? Many workers experience this uncertainty because they don’t fully understand the deductions taken from their earnings each pay period, including taxes, Social Security, and Medicare. Using a paystub calculator can help you estimate your take-home pay in advance, giving you a clearer picture of your earnings and deductions. If you’ve ever dealt with errors in your paycheck, a missing paystub calculator can also help verify the accuracy of your payroll.
In this guide, we’ll break down what’s included in your pay stub, explain the deductions, and show you how to calculate your pay stub on your own. Keep reading to take control of your earnings!
What is Included in a Paystub?
A pay stub is a detailed breakdown of an employee’s earnings and deductions, provided each time they get paid. It outlines key financial information, including wages earned, taxes withheld, and other deductions. Each pay stub includes:
1) Current and Year-to-Date (YTD) Earnings – Displays the employee’s earnings for the specific pay period and the total accumulated earnings for the year.
2) Deductions – Lists amounts withheld from earnings, including:
- Employee Tax Deductions – Federal income tax, state and local taxes (if applicable), and FICA tax (Social Security and Medicare).
- Benefits & Other Deductions – Contributions to employer-sponsored benefits like health insurance, retirement plans, or charitable donations.
- Employer Contributions – The employer’s share of benefits and FICA tax contributions.
At the bottom of the pay stub, the net pay (take-home pay) is shown—this is the amount deposited into the employee’s account after all deductions.
How to Calculate Net Income
Before you can accurately determine your net pay, it’s essential to understand how to read your pay stub and identify the key details that affect your final paycheck.
Information Used to Generate a Pay Stub
Employers create pay stubs using the following details:
- Payroll cycle (weekly, bi-weekly, semi-monthly, or monthly)
- Gross wages (total earnings before deductions)
- Tax withholdings (federal, state, and local, if applicable)
- Benefit deductions (pre-tax and post-tax contributions)
- Employee allowances (as specified on the employee’s W-4 form)
Once you understand what’s included in your pay stub, follow these steps to calculate your pay stub and determine your take-home pay.
1 — Deduct Pre-Tax Contributions
Determine your taxable income by subtracting any pre-tax deductions from your gross wages. Pre-tax deductions reduce your taxable income, lowering the amount of taxes withheld. These may include:
- Health insurance premiums
- 401(k) or other retirement contributions
- Commuter assistance plans
Using a pay stub calculator can make this process much easier, helping you quickly assess your deductions and taxable income.
2 — Withhold Applicable Taxes
After deducting pre-tax contributions, taxes must be withheld from the remaining income. This typically includes:
- Federal income tax (based on tax brackets and W-4 allowances)
- State and local taxes (varies by location; some states do not have an income tax)
- FICA Tax (Social Security & Medicare)
- Social Security tax: 6.2% (only applied to earnings up to a certain limit, e.g., $176,100 in 2025)
- Medicare tax: 1.45% (applies to all earnings)
- Employers match these contributions, paying the same amount to the IRS.
Employers match these contributions, paying the same amount to the IRS. To ensure you’re withholding the correct amount, a pay stub tax calculator can be a valuable tool.
3 — Deduct Post-Tax Contributions
After taxes are withheld, any post-tax deductions are subtracted. These are voluntary deductions for benefits or contributions not eligible for pre-tax status, such as:
- Disability insurance
- Life insurance
- Additional retirement plan contributions
- Charitable donations
Using a paycheck stub calculator can help track these deductions accurately, ensuring your net pay reflects the correct take-home amount.
4 — Apply Wage Garnishments (if applicable)
Employers may be legally required to deduct wage garnishments for court-ordered payments, including:
- Unpaid taxes
- Child support or alimony
- Loan repayments
- Credit card debt
- Medical bills
If you’re missing details on your deductions, a missing paystub calculator can help you reconcile the numbers.
5 — Final Calculation: Your Net Pay
After subtracting pre-tax deductions, taxes, post-tax deductions, and garnishments (if applicable), the remaining amount is your net pay—the actual amount deposited into your bank account.
Example: How to Calculate Your Paystub
To better understand the process of calculating your pay stub, let’s walk through a simple example.
Alex earns an annual salary of $75,000, and his company processes payroll bi-weekly (26 pay periods per year). To determine his gross pay per period, we divide:
$75,000 ÷ 26 = $2,884 (gross pay per pay period)
Deductions:
- Federal Taxes: Based on the allowances from his W-4, 20% of his gross pay is withheld for federal taxes:
$2,884 (gross pay per pay period) × 20% = $577
- State Taxes: Alex lives in a state with no income tax, so no state taxes are deducted.
- Health Insurance: Alex contributes $50 per pay period toward his company’s health insurance plan.
Net Pay Calculation:
Alex’s net pay (take-home pay) is calculated as follows:
$2,884 (gross pay) – $577 (federal tax) – $50 (health insurance) = $2,257 (net pay)
*This example applies to salaried employees, whose pay remains consistent each period. Hourly employees will also see details on total hours worked, overtime wages, and applicable deductions on their pay stub.*
His pay stub will include all of these details for both the current payroll period and the year-to-date (YTD) totals. For a quick and easy way to verify your earnings, try using a check stub calculator to ensure all numbers align correctly.
FormPros Has You Covered!
Knowing how to read and calculate your pay stub ensures you have full transparency over your earnings, deductions, and take-home pay. By staying informed, you can catch potential errors, plan your finances more effectively, and adjust tax withholdings if necessary.
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