1. What is Net Pay?

Net pay, often called "take-home pay," is the amount of money you receive after all deductions have been subtracted from your gross pay. These deductions typically include federal and state taxes, Social Security and Medicare taxes (FICA), and possibly local taxes.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Gross\ Pay \) — Your total earnings before any deductions
• \( Federal\ Tax \) — Income tax withheld for federal government
• \( State\ Tax \) — Income tax withheld for state government
• \( FICA \) — Social Security and Medicare taxes (7.65% of gross pay)
• \( Local\ Tax \) — Additional local/city taxes if applicable

3. Understanding Deductions

Federal Tax: Based on IRS tax brackets and your W-4 allowances.
State Tax: Varies by state (some states have no income tax).
FICA: 6.2% for Social Security + 1.45% for Medicare = 7.65% total.
Local Tax: Some cities/counties impose additional income taxes.

4. Using the Calculator

Tips: Enter your annual gross salary, estimated federal and state tax amounts, and any local taxes if applicable. The calculator will automatically compute FICA and your final net pay.

5. Frequently Asked Questions (FAQ)

Q1: Why is FICA automatically calculated?
A: FICA is a fixed percentage (7.65%) of your gross pay for Social Security and Medicare taxes.

Q2: How do I know my federal and state tax amounts?
A: These can be estimated using IRS tax tables and your state's tax calculator, or from your pay stubs.

Q3: Are there other deductions not included here?
A: Yes, this calculator doesn't account for retirement contributions, health insurance premiums, or other voluntary deductions.

Q4: Is local tax mandatory?
A: Only if you live in a city/county that imposes local income taxes (like NYC or Philadelphia).

Q5: How accurate is this calculator?
A: It provides a good estimate, but your actual take-home pay may vary based on exact withholding amounts and additional deductions.