Salary After Tax

Gross income, less any allowance the country gives, produces taxable income. The progressive bands are then applied to that taxable figure — each rate to the slice of income inside its own band, never to the whole. Contributions and levies are calculated separately and shown as their own lines, because they are separate things: National Insurance is not income tax, and the Medicare levy is not income tax either.

The effective tax rate is income tax as a share of gross income. The total deduction rate includes contributions and levies as well. They are different numbers and both are shown, because quoting the second as though it were the first overstates how much income tax anyone pays.

The single most common misunderstanding about income tax is that crossing into a higher band taxes all of your income at the higher rate. It does not — only the part inside that band is. A pound more income never leaves you with less money after tax.

Listing every band with the amount inside it and the tax on it is the clearest way to show that, which is why the breakdown is the main output here rather than something hidden behind a toggle.

The American calculation has two axes rather than one. Filing status changes both the standard deduction and the whole rate schedule — a single filer reaches the 24% bracket at $105,700 of taxable income, a couple filing jointly at $211,400 — so it is chosen before anything else. The standard deduction for 2026 is $16,100 single, $32,200 married filing jointly, $24,150 head of household and $16,100 married filing separately, and it is subtracted from gross pay to give taxable income before any bracket is touched.

FICA is calculated separately from income tax and on a different base. It is charged on gross wages, not on taxable income, so the standard deduction does not reduce it. It is shown as three lines because it is three charges with three different ceilings: Social Security at 6.2% stops at the $184,500 wage base, so it never exceeds $11,439.00; Medicare at 1.45% has no ceiling at all and keeps going on every dollar; and the Additional Medicare Tax of 0.9% starts above $200,000, or $250,000 filing jointly, or $125,000 filing separately. Only the employee half is deducted here — your employer pays a matching 6.2% and 1.45% that never appears on your payslip.

State income tax is included only where there is none to include. Nine states levy no individual income tax, and each is cited to that state's own revenue authority. Choose one of those and the result is a complete answer. Choose any other state and it is marked not included: the federal and FICA figures are still exact, but the take-home line is labelled as being before state tax, because a state rate this page has not read from the authority that sets it is not a number worth inventing. Local income taxes are not calculated for any state.

A qualifying child under 17 is worth up to $2,200 for 2026 and any other dependant $500. Both are withdrawn above $200,000 of income, or $400,000 on a joint return, and the withdrawal is stepped rather than smooth: the excess is rounded up to the next whole $1,000 and 5% of that is taken off, so earning one dollar past a step boundary costs a full $50 of credit.

A credit is not a deduction. A deduction takes money off the income your tax is worked out on; a credit takes money off the tax itself, which is why $2,200 of Child Tax Credit is worth $2,200 to everyone who can use it, while $2,200 of deduction is worth $484 at the 22% rate. And up to $1,700 per child is refundable, meaning it can be paid out beyond the tax you owe — capped at 15% of your earned income above $2,500. At a low enough income the calculator will show a negative federal income tax and a take-home figure larger than the salary, which is not an error: that is what a refundable credit does.

Hold an asset more than a year and the gain is long-term, taxed at 0%, 15% or 20%. Hold it a year or less and it is short-term, taxed at your ordinary rate — which tops out at 37%. Crypto is property for this purpose, so the same one-year line applies to it, and so does the rule that every disposal is a taxable event: swapping one coin for another is a sale, not a transfer.

The part people get wrong is that the preferential rates are not applied to the gain in isolation. Long-term gains stack on top of your ordinary income, so how much of a gain falls in the 0% band depends on how much salary is underneath it. On $40,000 of gain with no other income, all of it is at 0%. On the same $40,000 with a $50,000 salary underneath, only $15,550 is at 0% and the rest is at 15%. The breakdown shows the split, because it is the only way to see that happening.

Above $200,000 of income — $250,000 filing jointly — investment income also picks up the Net Investment Income Tax of 3.8%. It is charged on the lesser of your investment income and the amount by which your total income exceeds the threshold, so it reaches neither a big gain on a small income nor a big income with no investments.

An employer pays half your Social Security and Medicare. Work for yourself and you pay both halves, as self-employment tax at 15.3%. It is charged on 92.35% of net profit rather than all of it, and it comes on top of income tax rather than instead of it, which is why a $60,000 side business does not leave anything like as much as a $60,000 salary.

Two things soften it, and both are applied here. Half the self-employment tax comes off your income before income tax is worked out. And the qualified business income deduction takes a further 20% of the profit off, capped at 20% of taxable income. Above the § 199A threshold — $201,750, or $403,500 filing jointly — that deduction starts to depend on wages the business paid, property it holds and whether it is a specified service trade, so the calculator applies none of it there and says so rather than guessing.

If you have a job as well, the two interact: wages use up the Social Security ceiling first. On a $180,000 salary plus $30,000 of profit, only $4,500 of that profit pays the 12.4% Social Security portion — though all of it still pays the 2.9% Medicare portion, which has no ceiling at all.

This calculates tax on a year's income. A payslip is the result of withholding, which is a forecast your employer makes from a W-4, a P45 or a tax code, and it is routinely wrong in both directions — that is what a refund or a balancing payment settles at the end of the year.

The gap is usually one of a small number of things: pre-tax deductions that are taken before tax is worked out at all (401(k), HSA, salary sacrifice, pension); credits that reduce the tax after it is calculated rather than reducing the income it is calculated on; a second income that changes which band the top of your earnings falls in; or a deduction larger than the standard one. Each calculator lists what it leaves out, next to the result rather than at the bottom of the page, and says which direction the omission pushes the figure.