Updated June 16, 2026 · 6 min read
Your paycheck is lower than you expect because gross pay and take-home pay are two different numbers. Between them sit three mandatory taxes — Social Security (6.2%), Medicare (1.45%), and income tax withholding — plus anything you elected pre-tax, like a 401(k) or health insurance. For most workers, 20–35% of gross pay never reaches the bank. Below are the seven things that shrink a paycheck, in the order they typically matter.
Social Security (6.2%) + Medicare (1.45%) = 7.65% comes out of nearly every dollar you earn, with no deductions to reduce it. On a $60,000 salary that's about $4,590 a year before a single dollar of income tax. This is the one piece almost everyone pays at the same rate. (What is FICA?)
Your employer estimates your yearly federal tax from your W-4 and withholds a slice each pay period. The more you earn — and the fewer dependents or deductions you claim — the more comes out. If your W-4 is set aggressively (or you checked the multiple-jobs box), withholding climbs fast.
Depending on where you work, state income tax can add 0% to about 10% on top of federal. Nine states take nothing; high-tax states like California take a meaningful bite. Some cities (NYC, Philadelphia, Yonkers) add a local tax too. (See states with no income tax.)
These lower your paycheck but aren't taxes — they're money going to *your* benefit, before tax:
Social Security only applies to the first $184,500 of wages in 2026. High earners see Social Security stop mid-year, so late-year paychecks get bigger. Early in the year, everyone is paying the full 6.2% again after the cap resets each January 1.
Bonuses are typically withheld at a flat 22% federal supplemental rate (37% above $1 million), plus FICA and state tax — which is why a bonus check can feel heavily taxed even though it's reconciled on your annual return. (How bonuses are taxed.)
A weekly check looks smaller than a monthly one for the same salary — it's just sliced thinner. Annual take-home is the same; only the per-paycheck amount differs.
Gross salary is before taxes and deductions. FICA takes 7.65%, federal income tax withholding takes roughly 10–15% for typical earners, state tax adds 0–10%, and any 401(k), HSA, or health insurance you elected comes out pre-tax. Together that's commonly 20–35% of gross.
Common causes: a new year reset Social Security and tax tables, a raise pushed more income into a higher bracket, you changed your W-4, benefit/401(k) elections changed during open enrollment, or insurance premiums increased.
If you earn more than the Social Security wage base ($184,500 in 2026), the 6.2% Social Security tax stops once you hit the cap, so your remaining paychecks that year are larger.
Make sure your W-4 isn't over-withholding, contribute pre-tax to an HSA or 401(k) (which also cuts taxable income), and know your state's rules. The calculator shows how each change affects your net pay.
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