Data sources
- Federal income tax brackets and standard deductions (2026): IRS Revenue Procedure 2025-32, as summarized by the Tax Foundation.
- Social Security and Medicare: 6.2% of wages up to $184,500; 1.45% Medicare plus 0.9% Additional Medicare withholding above $200,000.
- State income tax rates, brackets, deductions, exemptions and credits (2026): Tax Foundation, “State Individual Income Tax Rates and Brackets, 2026”.
- State disability, paid family and medical leave and long-term care programs (2026): EY Tax News, 2026 state disability, PFML and LTC wage bases and rates.
How the estimate works
- Annualize your pay (salary, or hourly × hours × 52, with overtime at 1.5×).
- Subtract pre-tax deductions: 401(k)/403(b) reduces income tax wages (not Social Security/Medicare); pre-tax health and HSA reduce both. New Jersey and Pennsylvania don’t allow 401(k) contributions to reduce state wages.
- Federal income tax: taxable wages minus the standard deduction, through 2026 brackets, minus the child tax credit ($2,200 per child under 17) and credit for other dependents ($500), with the standard phase-out.
- State income tax: state taxable wages minus the state standard deduction, personal and dependent exemptions, through 2026 brackets, minus personal credits.
- State payroll programs and local tax at the rate you enter.
- Divide by your number of paychecks.
Simplifications
- Employers use withholding tables, which approximate annual tax; your paycheck can differ by a few dollars, and your refund or balance due settles the difference.
- We don’t model itemized deductions, W-4 extra withholding, most tax credits, phase-outs of some state deductions and exemptions, or every local tax.
- Head-of-household filers use single-filer state rules in states where we don’t have separate figures.
- The optional overtime deduction estimate applies to the FLSA overtime premium only.
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