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Salary Calculation Formula:
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Take-home salary (net pay) is the amount of money you actually receive after all deductions including federal tax, state tax, and FICA (Social Security and Medicare) contributions have been subtracted from your gross pay.
The calculator uses the following formula:
Where:
Explanation: The calculator subtracts all mandatory deductions from your gross pay to determine your actual take-home pay.
Details: Understanding your net pay helps with budgeting, financial planning, and ensuring you're being taxed correctly. It's especially important in California where state taxes are relatively high.
Tips: Enter your annual gross salary in USD, estimated federal tax, California state tax, and FICA contributions. All values must be positive numbers.
Q1: What's the difference between gross pay and net pay?
A: Gross pay is your total salary before deductions, while net pay is what you actually take home after all taxes and deductions.
Q2: Why are California taxes higher than other states?
A: California has progressive state income tax rates that are among the highest in the nation, especially for higher income earners.
Q3: What is included in FICA?
A: FICA includes Social Security (6.2%) and Medicare (1.45%) taxes. For 2023, Social Security tax applies only to the first $160,200 of earnings.
Q4: Are there other deductions not included here?
A: Yes, this calculator doesn't account for voluntary deductions like health insurance, retirement contributions, or wage garnishments.
Q5: How can I estimate my tax amounts?
A: You can use IRS tax tables for federal tax and California FTB tables for state tax, or consult a tax professional.