1. What is Net Salary Calculation?

The net salary calculation determines your take-home pay after deducting taxes and retirement contributions from your gross salary of $120,000 in Massachusetts.

2. How Does the Calculator Work?

The calculator uses the following equation:

Where:

• \( \text{Federal Tax} \) — Federal income tax amount
• \( \text{MA State Tax} \) — Massachusetts state income tax
• \( \text{FICA} \) — Social Security and Medicare taxes
• \( \text{Retirement Contribution} \) — 401(k) or other retirement plan contributions

Explanation: The equation subtracts all deductions from the gross salary to determine the actual take-home pay.

3. Importance of Net Salary Calculation

Details: Understanding your net salary helps with budgeting, financial planning, and retirement planning by showing your actual disposable income.

4. Using the Calculator

Tips: Enter all tax amounts and retirement contributions in dollars. The calculator will compute your net salary after all deductions.

5. Frequently Asked Questions (FAQ)

Q1: What's included in FICA?
A: FICA includes Social Security (6.2%) and Medicare (1.45%) taxes, totaling 7.65% of your gross salary up to the Social Security wage base.

Q2: How is Massachusetts state tax calculated?
A: Massachusetts has a flat 5% income tax rate, though certain deductions may apply.

Q3: Are retirement contributions pre-tax?
A: Traditional 401(k) contributions are pre-tax, reducing your taxable income. Roth contributions are post-tax.

Q4: What other deductions might apply?
A: Health insurance premiums, HSA contributions, and other benefits may further reduce your take-home pay.

Q5: How accurate is this calculator?
A: This provides an estimate. Actual paychecks may vary based on exact withholding calculations and other factors.