Methodology & sources

Every formula and data source is documented here. Data last verified October 31, 2026 for tax year 2026.

Federal income tax withholding

1. Annual wages = salary, or hourly rate × hours × 52 plus overtime at 1.5×.
2. Subtract pre-tax deductions: traditional 401(k)/403(b) (capped at $24,500) and Section 125 benefits (health, dental, vision, HSA/FSA).
3. Add W-4 Step 4(a) other income and subtract Step 4(b) deductions.
4. Subtract the 2026 standard deduction ($16,100 single, $32,200 married, $24,150 head of household). With Step 2 checked, half the standard deduction and half-width brackets are used, matching the IRS Step 2 tables.
5. Apply the 2026 brackets (10%–37%), subtract the Step 3 credit, divide by pay periods, add Step 4(c).

FICA

Social Security is 6.2% of wages up to $184,500; Medicare is 1.45% of all wages plus 0.9% withheld above $200,000. Section 125 benefits reduce FICA wages; 401(k) deferrals do not.

State income tax

We compute each state’s annual tax on state taxable wages using its 2026 brackets, standard deduction, exemptions and credits, then spread it evenly across pay periods. Special rules we model:

• Federal taxable income starting point: Colorado, District of Columbia, Idaho, Iowa, Missouri, Montana, New Mexico, North Dakota, South Carolina.
• Federal tax deductions: Alabama (full), Missouri (35%–0% by income, capped), Oregon (capped and phased out).
• Phased exemptions and credits: Connecticut personal exemption phase-out, Ohio exemption tiers, Utah taxpayer credit, Alabama standard deduction chart, per-person credits in Arkansas, California, Delaware, Iowa, Nebraska and Oregon.
• Arizona withholds the Form A-4 percentage you choose; we also show the estimated 2.5% liability.
• Pennsylvania taxes 401(k) deferrals.

Local taxes and state payroll programs

Local taxes use published rates for the listed cities and counties, or the rate you enter (Indiana and Maryland counties, other cities). Maryland and Indiana county taxes apply to state taxable income; Portland Metro and Multnomah taxes apply above their income thresholds. State programs (CA SDI 1.3%; NJ UI/WF/TDI/FLI; NY SDI and PFL; RI TDI 1.1% to $100,000; HI TDI max $7.50/week; WA PFML and WA Cares; CO FAMLI; MA, CT, OR, MN, ME and DE paid leave; Oregon transit tax; Vermont child care; PA UC) use 2026 employee rates and caps.

Known simplifications

• Head-of-household filers in Alabama, California, Hawaii, Kansas, Maine, Minnesota, Nebraska, North Dakota, Vermont, Wisconsin are estimated with the single bracket schedule where we have not verified a separate 2026 head-of-household schedule; this can slightly overstate state tax.
• Wisconsin’s sliding standard deduction is applied at its maximum (phase-out not modeled).
• High-income exemption phase-outs (Maryland, California, Oregon credits), New York and Connecticut benefit recapture, Arkansas low-income tables and state-specific withholding formulas are not modeled.
• Reciprocal agreements and multi-state work are not modeled: choose the state whose tax is withheld from your pay.

Update policy

We re-verify every rate each January and when states pass mid-year changes (for example Georgia’s 2026 cut to 4.99%). Spotted an outdated number? Tell us — confirmed corrections are published within two business days.