Rules
How IRS Publication 15 and SSA wage limits shape US take-home pay
Salary occupation guide: how IRS Publication 15 withholding tables, the Social Security wage base, and Medicare thresholds set your take-home pay at any salary.
What to take away
- Federal income tax withholding comes from percentage method tables in Publication 15-T. Publication 15 covers employer deposits and filings.
- The 2026 Social Security wage base is $184,500. The 6.2 percent tax stops there. Medicare's 1.45 percent never stops.
- An extra 0.9 percent Medicare tax applies above $200,000 for single filers and $250,000 for joint filers.
- Your W-4 drives the result more than your salary does.
- Pre-tax health premiums cut income tax and FICA. Pre-tax 401(k) contributions cut income tax only.
Publication 15 and Publication 15-T do different jobs
Gross pay is the number you agreed to. Net pay is what reaches your account after federal income tax, FICA and any state tax. A public accounting salary guide lists base pay by city and career stage, which is the gross figure this math starts from.
The withholding tables live in Publication 15-T, Federal Income Tax Withholding Methods. Publication 15, the Employer's Tax Guide, covers the duties around them: who counts as an employee, when deposits are due, which returns to file.
The percentage method runs in five steps.
- Start with gross wages for the pay period.
- Subtract pre-tax deductions that are exempt from income tax.
- Annualize the result by multiplying by the number of pay periods.
- Subtract the standard deduction for your filing status, then apply the bracket rates.
- Divide back to the pay period and add any extra withholding from Step 4 of your W-4.
[figure 1]
Gross Pay to Net Pay
- Add taxable wages for the period
- Subtract pre-tax deductions
- Apply Publication 15-T percentage method
- Add FICA taxes
- Result: net pay deposited
For a single filer, the annual table starts at 10 percent on the first $11,925 of taxable wages, then 12 percent to $48,475 and 22 percent to $103,350.
Your W-4 supplies the inputs. Step 1 sets filing status, Step 2 covers a second job, Step 4 adds extra withholding. A careless form produces a large refund or an April bill, and the rules for filing a return show how the year reconciles.
Social Security and Medicare figures for 2026
FICA is two taxes billed together. Social Security takes 6.2 percent from you and 6.2 percent from your employer. Medicare takes 1.45 percent from each side, so your share is 7.65 percent of wages.
Social Security has a ceiling. The 2026 wage base is $184,500. Past that, the 6.2 percent stops for the year, even at a $400,000 salary.
Medicare has no ceiling. The 1.45 percent applies to every dollar. The Additional Medicare Tax adds 0.9 percent above $200,000 single, $250,000 joint and $125,000 married filing separately.
[figure 2]
2026 FICA Thresholds
- $184,500Social Security wage base
- 6.2%Social Security rate each side
- 1.45%Medicare rate each side
- $200,000Additional Medicare Tax, single
Those thresholds are fixed by statute, not indexed like the wage base.
Example: net pay at $45,000, $85,000 and $150,000
Assumptions: single filer, standard deduction, biweekly pay, 5 percent pre-tax 401(k), no state tax.
| Line | $45,000 | $85,000 | $150,000 |
|---|---|---|---|
| Gross per period | $1,730.77 | $3,269.23 | $5,769.23 |
| 401(k) at 5 percent | $86.54 | $163.46 | $288.46 |
| Federal income tax | $118.90 | $360.73 | $901.81 |
| Social Security | $107.31 | $202.69 | $357.69 |
| Medicare | $25.10 | $47.40 | $83.65 |
| Net per period | $1,392.92 | $2,494.95 | $4,137.62 |
At $45,000, net pay is about 80 percent of gross, and the standard deduction covers much of the income. The 401(k) line lowers taxable wages but not FICA. Pay levels swing by market too, and business analyst salary by state shows where gross pay outruns local costs.
At $150,000, Social Security is still withheld in full because the salary sits below the $184,500 base. A $200,000 earner sees that tax stop midyear, lifting take-home pay in the final months.
State tax in California, Texas and New York
The same $85,000 produces different take-home pay in all three states.
| Location | Approximate state and local tax | Notes |
|---|---|---|
| Texas | $0 | no state wage tax |
| California | about $4,000 | plus about $1,000 disability insurance |
| New York, outside NYC | about $4,100 | state tables only |
| New York City | about $7,000 | state plus city tax |
These estimates use published single-filer brackets and exclude property and sales taxes, which run higher in Texas.
California does not allow a 401(k) deduction at the state level, so a pre-tax contribution lowers federal wages only.
New York adds a small paid family leave contribution, and salary tax in California, Texas and Washington runs the same arithmetic in a state with no income tax but a payroll levy.
Pre-tax deductions and which taxes they cut
Not every pre-tax deduction lowers every tax.
- 401(k) contributions: lower federal and most state income tax, not FICA.
- Health insurance premiumsusually lower income tax and FICA.
- Health savings account contributions through payrolltypically lower income tax and FICA.
- Dependent care FSAlowers income tax and, for most employees, FICA.
At a 22 percent bracket, a dollar of health premium saves roughly 30 cents once the 7.65 percent FICA share is added. A dollar of 401(k) saves the income tax portion only.
Roth 401(k) contributions come out after tax, so they change nothing today. Employer match formulas vary widely.
Where to verify your own withholding
The IRS Tax Withholding Estimator takes your income, deductions and credits and tells you whether to file a new W-4. Your IRS online account shows payments, balances and transcripts.
Compare your stub against year-to-date totals. If Social Security tax continues after year-to-date wages pass $184,500, ask payroll to stop it. The excess is refundable when you file.
Employers also pay 6.2 percent and 1.45 percent on your wages. What a $50,000 salary costs an employer in Texas totals that share, which is why compensation runs above gross pay.
For occupation benchmarks, wage data for accountants and auditors gives median pay by state.
