1. What is the True Salary Calculator?

The True Salary Calculator compares net salaries across US states by accounting for differences in state taxes. It helps you understand how much you'll actually take home after all deductions.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( \text{Gross Pay} \) — Annual salary before taxes
• \( \text{Federal Tax} \) — Federal income tax amount
• \( \text{State Tax} \) — State income tax amount (varies by state)
• \( \text{FICA} \) — Social Security and Medicare taxes

Explanation: The calculator shows how state taxes significantly impact your take-home pay, allowing for meaningful comparisons between different locations.

3. Importance of Net Pay Calculation

Details: Understanding your net pay is crucial for financial planning, comparing job offers in different states, and making informed decisions about relocation.

4. Using the Calculator

Tips: Enter your gross annual salary, estimated federal tax, select your state, enter state tax amount, and FICA contributions. The calculator will show your actual take-home pay.

5. Frequently Asked Questions (FAQ)

Q1: Why compare salaries by state?
A: State taxes vary significantly - some states have no income tax while others have high rates, dramatically affecting your actual purchasing power.

Q2: What are FICA taxes?
A: FICA includes Social Security (6.2%) and Medicare (1.45%) taxes that all employees pay on their earnings.

Q3: How accurate are these calculations?
A: Results are estimates - actual take-home pay may vary based on additional local taxes, deductions, or credits.

Q4: Which states have no income tax?
A: As of 2023: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Q5: Should I consider other cost-of-living factors?
A: Yes, while taxes are important, also consider housing costs, transportation, and other living expenses when comparing locations.