Types of Payroll Deductions
Required deductions
- Federal income tax, set by Form W-4.
- Social Security, 6.2% up to $184,500.
- Medicare, 1.45%, plus 0.9% above $200,000.
- State and local income tax, and state disability insurance in 5 states.
Pre-tax deductions
- Traditional 401(k) and 403(b): skip income tax, pay FICA.
- Health, dental and vision premiums, HSA and FSA through a Section 125 plan: skip income tax and FICA.
Post-tax deductions
- Roth 401(k), union dues, life insurance above $50,000, wage garnishments and charitable payroll giving.
Order of Payroll Deductions
Payroll deductions come out in a fixed order: pre-tax deductions first, then taxes on the remaining wages, then post-tax deductions. The order is why a $100 pre-tax health premium lowers net pay by less than $100.
The HSA and FSA Calculator shows the tax saved by a Section 125 deduction.
Payroll Deduction Example
A $2,600 biweekly paycheck loses $613.77 to deductions and pays $1,986.23 for a single filer in Texas with a 5% 401(k) and $90 of health premiums.
| Pay stub line | Per paycheck |
|---|---|
| Gross pay | $2,600 |
| 401(k) | −$130 |
| Health, HSA, FSA (pre-tax) | −$90 |
| Federal income tax | −$201.75 |
| Social Security | −$155.62 |
| Medicare | −$36.40 |
| Net pay | $1,986.23 |
Federal income tax comes from the 2026 brackets and standard deduction for a single filer, as on a W-4 with no adjustments. Social Security and Medicare are figured on pay after the health premium but before the 401(k).
Payroll Deductions by State
State income tax is the payroll deduction that changes most from one state to the next; federal tax, Social Security and Medicare are the same everywhere.
| State | State tax per paycheck | Net pay per paycheck |
|---|---|---|
| Texas | $0 | $1,986.23 |
| Arizona | $59.50 | $1,926.73 |
| Pennsylvania | $77.06 | $1,909.17 |
| Illinois | $117.81 | $1,868.42 |
Same $2,600 biweekly check, 5% 401(k), $90 health premium. A few states also take state disability or paid family leave insurance, which this table leaves out.
Payroll Deductions for Hourly Workers
Hourly workers have the same payroll deductions as salaried workers, taken from that period's gross pay, so the amounts move with the hours worked.
At $20 an hour, 80 hours in a biweekly period is $1,600 of gross pay. With a 5% 401(k) and a $90 premium, the check is $1,226.73 after $373.27 of deductions. Overtime hours raise the gross and every percentage deduction with it.
The Hourly Paycheck Calculator starts from the rate and hours instead of the gross check.
Payroll Deductions by Pay Frequency
Pay frequency splits the same yearly deductions into more or fewer pieces; it does not change the yearly total of tax on the same pay.
| Frequency | Gross per paycheck | Net per paycheck |
|---|---|---|
| Weekly | $1,300 | $993.12 |
| Biweekly | $2,600 | $1,986.23 |
| Semi-monthly | $2,816.67 | $2,151.75 |
| Monthly | $5,633.33 | $4,303.50 |
All rows are $67,600 a year with $2,340 of yearly health premiums, single, Texas.
Employer Payroll Taxes
Employers pay their own payroll taxes on top of wages; none of it comes out of the employee's check.
- Employer FICA: a matching 6.2% Social Security up to $184,500 and 1.45% Medicare with no cap. On a $2,600 check with a $90 health premium, the employer owes $192.02.
- FUTA: 6.0% of the first $7,000 of each worker's wages, cut to 0.6% ($42 a year) with the full credit for state unemployment tax.
- State unemployment (SUTA): a rate set by the state for each employer, on a state wage base.
The 0.9% Additional Medicare Tax has no employer match.
Wage Garnishment Limits
Federal law caps an ordinary wage garnishment at the lesser of 25% of disposable earnings or the amount above 30 times the federal minimum wage. Disposable earnings are pay after taxes and other legally required deductions.
- Protected amount: 30 × $7.25 = $217.50 a week cannot be garnished for ordinary debts.
- Child support: up to 50% of disposable earnings for a worker supporting another spouse or child, 60% otherwise, plus 5% when payments are more than 12 weeks behind.
- Federal student loans and tax levies: follow separate rules.
The Deduction Your W-4 Controls
Form W-4 sets the federal income tax deduction on each paycheck; the other payroll deductions do not depend on it.
- Step 1: filing status, which picks the withholding brackets.
- Step 2: multiple jobs or a working spouse, which raises withholding.
- Step 3: credits for dependents, which lower it.
- Step 4: other income, extra deductions and any extra amount to withhold.
The Withholding Calculator shows the paycheck effect of each W-4 entry.
Frequently Asked Questions
How are payroll tax deductions calculated?
Payroll tax deductions are calculated on gross pay minus pre-tax deductions: federal tax from the W-4 and brackets, 7.65% FICA, and the state rate.
How much tax is deducted from a paycheck?
About 15% to 30% of a paycheck goes to taxes at typical US wages: federal income tax, 7.65% FICA and 0% to 10% state tax.
What is a payroll calculator?
A payroll calculator is a tool that turns gross pay into net pay by applying taxes and deductions for one pay period.
How do I calculate payroll deductions?
You calculate payroll deductions by subtracting pre-tax deductions, then taxes, then post-tax deductions from gross pay, in that order. What is left is net pay.
How much payroll tax will I pay?
On a $2,600 biweekly check, a single filer in Texas pays $393.77 of tax per paycheck: federal income tax, Social Security and Medicare.
What payroll taxes does the employer pay?
The employer pays a matching 7.65% FICA, federal unemployment tax and state unemployment tax. These are a cost to the employer and are not taken from wages.
Is a 401(k) deduction taken before tax?
A traditional 401(k) is taken before federal and most state income tax but after FICA. A Roth 401(k) is taken after all taxes.
What is the maximum wage garnishment?
For ordinary debts the maximum is 25% of disposable earnings, or less when weekly disposable pay is close to $217.50. Child support orders can take up to 65%.