THE SALARY PAYCHECK CALCULATOR

Gross pay is the total amount an employee earns before any deductions or taxes are taken out. Net pay, also known as take-home pay, is the amount the employee receives after taxes, benefits, and other deductions are subtracted.

The gross pay method involves calculating an employee's earnings before any taxes or deductions. This includes hourly wages, salary, bonuses, overtime, and any other compensation.

Pay frequency refers to how often employees are paid, such as weekly, bi-weekly, semi-monthly, or monthly. For salaried employees, the annual salary is divided by the number of pay periods to determine the amount paid each paycheck.

Bi-weekly means employees are paid every two weeks, typically resulting in 26 pay periods per year. Semi-monthly means employees are paid twice per month, usually on the 15th and the last day of the month, for a total of 24 pay periods annually.

Withholding refers to the amount taken out of an employee's wages for taxes, such as federal, state, and FICA taxes. Deductions include both withholdings and other amounts taken out, like health insurance premiums, retirement contributions, or wage garnishments.

FICA stands for the Federal Insurance Contributions Act. It includes Social Security and Medicare taxes. In 2025, employees pay 6.2% for Social Security (on wages up to $168,600) and 1.45% for Medicare (with no income cap). Employers match these amounts.

For 2025:

• Social Security: 6.2% on wages up to $168,600.

• Medicare: 1.45% on all wages, plus an additional 0.9% for individuals earning over $200,000 (employers do not match this additional Medicare tax).

State tax withholding is the amount withheld from an employee’s paycheck to cover state income taxes. It is calculated based on the employee's earnings, state tax rates, filing status, allowances or exemptions claimed, and any additional state-specific rules.

SUI is a tax paid by employers to fund unemployment benefits for eligible workers. Rates and wage bases vary by state. In some states, employees may also contribute a small amount toward unemployment insurance.

Yes. Bonuses are considered supplemental wages by the IRS and may be taxed using a flat percentage method (currently 22%) or combined with regular wages and taxed at the employee’s usual rate. Some states may also have special rules for bonus taxation.

Single is the default status for individuals not married or not qualifying for another status. Head of household is for individuals who are unmarried, pay more than half the cost of keeping up a home, and have a qualifying dependent. Head of household typically has a higher standard deduction and more favorable tax brackets than single.

Pre-tax deductions are taken out before taxes are calculated, reducing your taxable income. Examples include health insurance premiums, 401(k) contributions, and commuter benefits. Post-tax deductions are taken after taxes are applied and do not reduce taxable income. Examples include Roth IRA contributions and some union dues.

In New York, employers must withhold both federal and state income taxes, as well as applicable local taxes (like New York City or Yonkers). Withholding is based on the employee’s Form IT-2104, which outlines allowances and filing status.

Local taxes, such as those in New York City or Yonkers, are calculated as a percentage of taxable income. NYC residents, for example, may pay up to 3.876% in additional income tax, depending on income level. Employers must withhold this based on the employee’s work and residence address.

You may owe taxes to both states. Typically, you pay income tax to the state where you work, and then claim a credit on your New York return to avoid double taxation. New York requires you to report all income and pay taxes as a resident, even if you earn income out of state.

New York’s Paid Family Leave (PFL) provides job-protected, paid time off to care for a family member with a serious health condition, bond with a new child, or assist when a family member is deployed on active military service. PFL is funded entirely by employees through payroll deductions. Employers are responsible for withholding the correct amount and remitting it to the insurance carrier. For 2025, the maximum annual contribution is capped and based on a percentage of the employee’s wages up to the state’s average weekly wage.

New York requires employers to provide Temporary Disability Insurance (TDI), also known as Disability Benefits Law (DBL) coverage. This insurance offers partial wage replacement to employees who are unable to work due to non-job-related illness or injury, including pregnancy. Employers typically cover the cost but may deduct up to 60 cents per week from each employee's paycheck to help fund the coverage. Self-employed individuals can opt in voluntarily.

The W-4 form was redesigned to remove withholding allowances. Instead, employees provide information like filing status, income from multiple jobs, and dependents. This helps employers calculate a more accurate withholding amount. The new form aligns better with changes from the Tax Cuts and Jobs Act.

• Misclassifying employees as independent contractors

• Failing to pay overtime correctly

• Missing tax deadlines or filing errors

• Not keeping up with federal and state law changes

• Inaccurate employee records or missing I-9 forms

• Incorrectly calculating deductions and withholdings

As of 2025, the following states do not levy state income tax:

• Alaska

• Florida

• Nevada

• South Dakota

• Tennessee

• Texas

• Washington

• Wyoming

Some of these states still have other taxes, such as higher sales or property taxes.

©2025 - Content on this blog is intended to provide helpful, general information. Because laws and regulations evolve, please consult an HR professional or legal expert for guidance specific to your situation.