Worked Examples
Four steps between what you earn and what actually lands in your account.
Figures current · August 2026
net = gross − fed − FICA − stateFICA = 7.65%
Take a single filer earning $60,000 a year. Before any money reaches the bank, three separate lines come out: about $5,020 in federal income tax (after the standard deduction), a flat 7.65% for FICA ($4,590), and — illustratively — a 4% state income tax ($2,400).
$47,990take-home on $60,000about 80% of gross
→Take-home pay is what's left after several separate withholdings stack up, not a single tax line.
taxable = gross − deduction2026 single: $16,100
That same $60,000 is not all taxable. In 2026 a single filer subtracts a $16,100 standard deduction first — no receipts, no itemizing. Only the $43,900 left underneath it ever meets a tax rate.
$43,900taxable income$16,100 never taxed
→The standard deduction erases a fixed first slice of income, so no tax rate ever touches it.
total = 6.2% + 1.45%, matched by the employeryou pay 7.65%
FICA is two taxes: 6.2% for Social Security and 1.45% for Medicare, 7.65% in all. On $60,000 that is $4,590 withheld from you — and your employer quietly pays an identical $4,590 match on top, for $9,180 in total.
$9,180total FICA on $60,000your half: $4,590
→The payroll line on your stub is only half the tax — the employer matches it dollar for dollar, and the whole 15.3% funds your own Social Security and Medicare.
taxable = gross − 401(k)comes off pre-tax
The same filer routes $6,000 of pay into a pre-tax 401(k). Because that money is set aside before tax is figured, taxable income falls from $43,900 to $37,900 — and at a 12% marginal rate, that trims about $720 off this year's federal tax.
$37,900taxable income, down from $43,900~$720 less federal tax
→A pre-tax contribution comes off income before the tax is figured, so the same dollars lower this year's taxable income and stay invested for later.
Sources: FICA rates — Social Security 6.2%, Medicare 1.45%, 7.65% employee share matched by the employer — and the $184,500 Social Security wage base, from IRS Topic No. 751 and the SSA rate tables; the $16,100 single standard deduction and the 2026 single brackets from IRS Revenue Procedure 2025-32. Checked 2026-08-24. The $60,000 salary and 4% state rate are illustrative; all other figures are derived from them.
