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Salary Calculation:
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Take home salary (net pay) is the amount an employee receives after all deductions including taxes, insurance, and retirement contributions. In California, this includes federal tax, state tax, and FICA (Social Security and Medicare) deductions.
The calculator uses the following formula:
Where:
Explanation: The calculation subtracts all mandatory deductions from gross pay to determine the actual amount the employee will receive.
Details: Understanding your take-home pay is crucial for budgeting, financial planning, and comparing job offers. California has some of the highest state taxes in the U.S., making accurate calculations particularly important.
Tips: Enter your annual gross salary and estimated tax amounts. For most employees, FICA will be 7.65% of gross pay (6.2% for Social Security up to the wage base and 1.45% for Medicare).
Q1: What's the difference between gross pay and net pay?
A: Gross pay is your total earnings before deductions, while net pay is what you actually receive after all taxes and deductions.
Q2: Why are California taxes higher than other states?
A: California has progressive state income tax rates that range from 1% to 13.3%, among the highest in the nation.
Q3: What is included in FICA?
A: FICA includes Social Security (6.2%) and Medicare (1.45%) taxes. High earners pay an additional 0.9% Medicare tax.
Q4: Are there other deductions not included here?
A: Yes, this calculator focuses on mandatory deductions. Other voluntary deductions (retirement, health insurance, etc.) would further reduce net pay.
Q5: How often should I calculate my take-home pay?
A: You should recalculate whenever your income changes significantly or at least annually to account for tax law changes.