1. What is Net Pay?

Net pay (or "bring home pay") is the amount of money an employee receives after all deductions have been taken from their gross pay. In Maryland, these deductions typically include federal tax, state tax, and FICA (Social Security and Medicare) contributions.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Gross Pay — Total earnings before deductions
• Federal Tax — Federal income tax withholding
• MD State Tax — Maryland state income tax
• FICA — Social Security and Medicare taxes (7.65% typically)

Explanation: The calculator subtracts all mandatory deductions from your gross pay to determine your actual take-home pay.

3. Importance of Net Pay Calculation

Details: Understanding your net pay is crucial for personal budgeting, financial planning, and ensuring proper tax withholding.

4. Using the Calculator

Tips: Enter your gross pay and estimated tax amounts. For most Maryland employees, FICA will be 7.65% of gross pay (6.2% for Social Security + 1.45% for Medicare).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between gross and net pay?
A: Gross pay is your total earnings before deductions, while net pay is what you actually receive after taxes and other deductions.

Q2: How is Maryland state tax calculated?
A: Maryland has progressive tax rates from 2% to 5.75% based on income brackets, plus local county taxes typically around 3.2%.

Q3: Are there other deductions not included here?
A: Yes, this calculator covers basic deductions. You may also have retirement contributions, health insurance premiums, or other voluntary deductions.

Q4: Why is my actual paycheck different?
A: Paychecks may differ due to pay frequency, pre-tax deductions, bonuses, or other compensation factors not accounted for in this simple calculator.

Q5: How often should I recalculate my net pay?
A: Recalculate whenever your income changes significantly or at least annually to account for tax law changes.