Pay period: How often you are paid. Your selections are: weekly (52 paychecks per year), every other week (26 paychecks per year), twice a month (24 paychecks per year), monthly (12 paychecks per year) and annually (one paycheck per year).
Gross pay: This is your gross pay, before any deductions, for the pay period.
Please enter a dollar amount from $1 to $1,000,000.
Filing status: This is your income tax filing status. The choices are "Single" and "Married".
Choose "Married" if you are married or file as "head of household". Choose "Single" if you file your taxes as a single person or if you are married but file separately.
Number of allowances: This is the number you put on your Form W-4 so your employer can calculate the amount of income tax to withhold from your paycheck. The more allowances you claim, the less income tax will be withheld. Usually, you claim one allowance each for yourself, your spouse and each of your dependents. However, you can adjust the number of allowances for your situation. If you have a lot of deductions or other tax write-offs, such as the child, dependent care or various education tax credits, that will reduce your final tax bill, you may want to claim more allowances so your withholding will be less. This will help you avoid having too much or not enough tax withheld. In 2008, each allowance you claim is equal to $3,500 of income that you expect to have in deductions or other tax breaks when you file your annual tax return. This calculator allows from zero to 99 allowances.
401(k)/403(b) plan withholding: This is the percent of your gross income you put into a taxable deferred retirement account such as a
401(k) or
403(b). While increasing your retirement account savings does lower your take home pay, it also lowers your Federal income tax withholdings. The impact on your paycheck might be less than you think. While your plan may not have a deferral percentage limit, this calculator limits deferrals to 80% to account for FICA (Social Security and Medicare) taxes. Please note that your
401(k) or
403(b) plan contributions may be limited to less than 80% of your income. Check with your plan administrator for details. For 2008, the maximum contribution to a
401(k) or
403(b) is $15,500 per year for individuals under 50 and $20,500 for individuals over 50.
State and Local Taxes: This is the percentage that will be deducted for state and local taxes. We take your gross pay, minus $3,500 per allowance, times this percentage to calculate your estimated state and local taxes. Please note, this calculator can only estimate your state and local withholdings.
Post-tax deductions: Enter any payroll deductions made by your employer that are made with after tax income.
Post-tax reimbursements: Enter any reimbursements made by your employer that are after tax.
FICA OASDI: FICA Old Age Survivors and Disability Insurance. FICA OASDI is calculated as your gross earnings times 6.2%. Please note that this calculator does not make any assumptions as to the total FICA OASDI paid for the current year. For 2008, incomes over $102,000 that have already had the maximum FICA OASDI amount of $6,324.00 withheld will not have additional FICA OASDI withholdings.
FICA Medicare: FICA Medicare is calculated as the gross earnings times 1.45%. Unlike FICA OASDI there is no annual limit to FICA Medicare deductions.
Federal tax withholding calculations: Federal income tax withholdings were calculated by:
- Multiplying taxable gross wages by the number of pay periods per year to compute your annual wage.
- Subtracting the value of allowances allowed (for 2008, this is $3,500 multiplied by withholding allowances claimed).
- Determining your annual tax by using the tables below (single and married rates, respectively).
- Dividing the amount of tax by the number of pay periods per year to arrive at the amount of federal withholding tax to be deducted per pay period.
Single Withholding Rates*
|
Annual taxable income between these amounts |
Annual withholding |
Withhold additional % of income over this amount |
| $0.00 |
$2,650.00 |
$0.00 |
|
|
| $2,650.00 |
$10,300.00 |
$0.00 |
10% |
$2,650.00 |
| $10,300.00 |
$33,960.00 |
$765.00 |
15% |
$10,300.00 |
| $33,960.00 |
$79,725.00 |
$4,314.00 |
25% |
$33,960.00 |
| $79,725.00 |
$166,500.00 |
$15,755.25 |
28% |
$79,725.00 |
| $166,500.00 |
$359,650.00 |
$40,052.25 |
33% |
$166,500.00 |
| $359,650.00 |
(no limit) |
$103,791.75 |
35% |
$359,650.00 |
| *This information is from IRS Publication 15, Rev. January 2008, for wages paid in 2008. |
Married Withholding Rates*
|
Annual taxable income between these amounts |
Annual withholding |
Withhold additional % of income over this amount |
| $ 0.00 |
$ 8,000.00 |
$0.00 |
|
|
| $ 8,000.00 |
$ 23,550.00 |
$0.00 |
10% |
$ 8,000.00 |
| $ 23,550.00 |
$ 72,150.00 |
$1,555.00 |
15% |
$ 23,550.00 |
| $ 72,150.00 |
$137,850.00 |
$8,845.00 |
25% |
$72,150.00 |
| $137,850.00 |
$207,700.00 |
$25,270.00 |
28% |
$137,850.00 |
| $207,700.00 |
$365,100.00 |
$44,828.00 |
33% |
$207,700.00 |
| $365,100.00 |
(no limit) |
$96,770.00 |
35% |
$365,100.00 |
| *This information is from IRS Publication 15, Rev. January 2008, for wages paid in 2008. |
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
