The salary on your offer letter is your gross pay. What lands in your bank account — your net pay — is smaller, often by 25–35%. Understanding the gap prevents budgeting mistakes like committing to a rent payment based on a number you never actually receive.
| Deduction | Typical amount |
|---|---|
| Federal income tax | 10-24% (bracket-based) |
| Social Security (FICA) | 6.2% |
| Medicare (FICA) | 1.45% |
| State income tax | 0-13% (varies by state) |
| 401(k), health premiums | Varies (pre-tax) |
For a rough number: someone earning $70,000 in a state with moderate income tax typically takes home around $52,000–$54,000 after federal tax, FICA, and state tax — before any 401(k) or health deductions. That's roughly $4,350/month, not the $5,833 the gross figure implies.
401(k) contributions and health-insurance premiums reduce your net pay, but they aren't gone — they're going to your future self or your coverage, and they lower your taxable income today. When you compare job offers or budget, separate true taxes (gone) from pre-tax savings (still yours).
Estimate your federal tax, FICA, and monthly take-home pay in seconds.
Tax Calculator →Payroll systems often withhold as if your current paycheck's rate applies all year, and new employees sometimes haven't optimized their W-4. If too much is withheld, you get it back as a refund; you can adjust your W-4 to keep more per paycheck instead.
Almost never. The US uses marginal tax brackets, so only the income above each threshold is taxed at the higher rate — a raise never reduces your take-home. The rare exception is losing an income-tested benefit at a specific cliff, which is separate from taxes.
Increase pre-tax contributions (they cut taxable income), make sure your W-4 is accurate, and take advantage of employer benefits like HSA or FSA accounts that reduce taxable income.