Net to Gross Paycheck Calculator

How much are your wages after taxes?

Starting a new job can be exciting, especially when you are guaranteed a salary. Knowing exactly how much money you will receive each month is very important for budgeting, and having a calculator can help you understand any paycheck deductions easily. By adding a few details about your payments and withholdings you can easily estimate your earnings after taxes. You can also learn more about what is being withheld from your check and why.
Your net and gross paycheck
After agreeing to a salary and working out the amount you are supposed to make each month, you may immediately notice that a portion of your wages are being taken out of your pay. It is important to understand the difference between net and gross pay and why these deductions are happening, in order to properly set your budget in advance.
The distinction between net and gross pay is fairly simple, where gross pay is your paycheck before any deductions and net pay is the money you actually take home. However, these various voluntary and mandatory deductions done by your employer (called withholdings) can be confusing to understand, and using a calculator can help to decipher where your earnings are going. By adding a few details about your income and withholdings you may see a complete breakdown of how your net and gross pay is calculated.
Your paycheck withholdings
Employers are required by law to withhold certain wages from employees for Federal and state purposes. These taxes then get forwarded to the appropriate tax authority for various programs and uses. The following are statutory contributions that you should expect to see taken from your paycheck:
• Federal and state income tax: income tax rates are determined by the amount of wages paid, as higher wages have higher withholding percentages and in some cases could impact your pay by up to 25%. Tax rates will vary between states as well, while some states do not even charge income taxes. This deduction is treated as a credit to the IRS for your 1040 series tax filing which is due at the end of the year.
• FICA tax: these are taxes used to fund the Social Security and Medicare programs that supplement income, disability, and insurance needs upon retirement. Employees can expect to have 6.2% deducted for Social Security and only 1.45% for Medicare.
Besides the mandatory withholdings, there are other elective deductions you may choose to have taken from your pay. These programs work directly to provide benefit to you and your family, should you choose to opt in.
• Retirement plans: Employers may sponsor pension programs such as 401(K), 403(b) or 457 plans. You may allocate a percentage of your pre-tax income to these programs for retirement savings while reducing your current income taxes. Employers will often provide matching contributions to your retirement account if you allocate a certain amount of funds to it each year- which can be a great benefit!
• Insurance premiums: Insurance premiums for dental, medical, vision, life or disability care may be deducted from your paychecks depending on the programs and level of coverage your employer offers.
• Job-related expenses: There may be some additional withholdings for things such as uniform costs, union dues, or even meal expenses, depending on your field of work and the arrangements made with your employer.
After taking into account these withholdings it is apparent that your net pay can be several hundred dollars less then your gross pay. While this can be disappointing at first, many elective contributions offer great benefits in the long run and should be used to their maximum benefit.
Can you limit your paycheck withholdings?
You may limit your paycheck withholdings by claiming exemptions on line 5 of your W-4 form, which you completed for your employer upon hiring. You may update this form yearly, or as needed when your financial situation changes. The more allowances you claim, the less federal income tax your employer will withhold from your wages. While the fewer allowances you claim, the more federal income tax that will be withheld.
Before opting for the bigger paycheck, keep in mind that your tax withholding is a credit to the IRS, so if you haven’t provided enough withholdings you may owe money when you file your taxes.
How will my paycheck be paid?
You may receive your payments weekly, every other week, monthly, twice a month, or annually. There are subtle differences between the frequencies, so it is important to confirm with your employer how often you will be getting paid. Usually the money is wired directly to your bank account, called direct deposit, but some employers offer cash or check payments.
Knowing exactly how much money you will receive each week or month will greatly help you to budget for your future and to ensure you don’t find yourself in hardship.
Using the calculator
The net to gross paycheck calculator is very easy to use and only consists of two parts: an information section and integrated results. You will need to know some basic figures when using the calculator, like your income details, filing status, allowances, and potential withholdings. Most of this information should be available through your employer or HR department, or a through a quick online search.
Step 1: Beginning with your payment information, you may add your net pay to the first line of the calculator. Here you should state the amount that you are currently receiving, or the amount you need to receive to satisfy your obligations. Then, select your pay frequency on the second line of the calculator by using the drop down menu.
Step 2: The next part of the calculator will ask you for general details about your taxes and withholdings. This incudes your filing status (whether you are single or married) and the number of allowances you claimed on line 5 of your W-4 form.
Step 3: On the following line of the calculator you may add details about your retirement contributions. If you will be making contributions please specify the percentage of your gross income to be deducted from your pay.
Step 4: Next, you should include the state and local taxes for your area, as well as any other pre-tax deductions or post tax deductions and reimbursements you may be entitled to. Other deductions may include insurance premiums, union dues, or uniform costs while reimbursements may cover any job-related courses you had to take.
Step 5: Proceed to view the integrated results.
Your results
Once your information is added to the net to gross paycheck calculator you will receive various prompts, graphs, and tables explaining the allocation of your earnings.
net gross paycheck
Immediately the system will generate an estimation of how much your gross paycheck should be to satisfy your specified net pay requirements. Below that prompt you will see a pie chart to offer a visual representation of how your paycheck is distributed. It will show what percentage of your gross pay goes towards taxes and contributions- giving you a clear indication of how much is left for you. This is your net pay in green.
net gross paycheck calculator
The second tab allows you to see a detailed breakdown of your paycheck summary with all the details you have already added. This may allow you to compare different levels of pay, try out different retirement contribution limits, and may help you decide if the insurance premiums are worth withholding. Without this essential information you will never know you are making the right decision for a financially secure future.
Remember to bookmark this page and save it to the home screen of your smart phone or tablet to always have this great tool at your fingertips. Kindly share us on social media to help others with their net or gross paycheck distributions.