Paycheck FAQ
The most common questions about U.S. paychecks, federal and state taxes, FICA, W-4s, and take-home pay — answered in plain English.
How accurate is this paycheck calculator?+
The calculator uses published 2026 federal brackets, the Social Security wage base, Medicare rates, and each state's official tax structure to produce a close estimate. It doesn't replace advice from a CPA — allowances, credits, and voluntary benefits will fine-tune your actual withholding.
Which states have no income tax?+
Nine states have no wage income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire fully repealed its Interest & Dividends Tax effective 2026.
What is the difference between marginal and effective tax rate?+
Marginal rate is the rate on your last dollar of income. Effective rate is total tax divided by total income. In a progressive system, effective is always lower than marginal because lower brackets tax the first dollars less.
How do 401(k) contributions affect my paycheck?+
Traditional 401(k) contributions come out of your paycheck pre-tax — they reduce federal taxable wages (and state wages in most states) but not FICA. Roth 401(k) contributions are post-tax and don't reduce current taxable income.
Why is my first paycheck smaller than expected?+
Employers withhold as if each paycheck represents an annualized run rate, so a partial first pay period sometimes withholds proportionally more. It also might not yet reflect W-4 adjustments or benefit deductions that started mid-cycle.
Are bonuses taxed differently?+
Bonuses are taxed at the same rates as regular income, but employers usually withhold using the IRS 22% supplemental wage rate. Any over-withholding is refunded when you file.
How does living in one state and working in another affect withholding?+
You may need to file a resident return in your home state and a non-resident return in the work state — with a credit for taxes paid to the other state — unless the two have a reciprocity agreement.
What are FICA taxes?+
FICA is a shorthand for Social Security (6.2% up to $184,500) plus Medicare (1.45%). Employers match your FICA contributions dollar-for-dollar.
What is the Additional Medicare Tax?+
An extra 0.9% Medicare tax on wages over $200,000 for single filers ($250,000 for married filing jointly). Employers begin withholding it the pay period you cross $200,000 regardless of filing status.
Do independent contractors pay the same taxes?+
No. 1099 workers pay 'self-employment tax' — both the employee and employer halves of FICA (15.3% combined) — plus federal and state income tax. They typically make quarterly estimated payments.
What is minimum wage?+
The federal minimum wage is $7.25/hr and has been unchanged since 2009. Most states set higher local floors — for example, DC ($17.50), Washington ($16.66), and California ($16.50).
How is overtime pay taxed?+
Overtime pay is taxed exactly like regular pay. There is no special overtime tax rate — the reason overtime paychecks feel highly taxed is that the temporary income bump can push withholding tables into higher bands, later reconciled at tax time.