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How to Calculate Your Take-home Pay From a Salary

1.

Multiply your salary by 7.65 percent to calculate the amount that will be deducted from your paycheck for payroll taxes. The 7.65 percent accounts for both Medicare and Social Security taxes. For example, if your monthly salary is $2,800, you would multiply $2,800 by 0.0765 to get $214.20.

2.

Check your financial records or ask your employer to see your W-4 form to determine how many personal allowances you claimed. The number of personal allowances decreases the amount of your salary subject to tax withholding.

3.

Multiply the number of allowances you claimed on your W-4 form by the value of a single personal allowance. The value changes annually to adjust for inflation. For 2010, each allowance equals $3,650, so if you claimed three allowances you would multiply $3,650 by 3 to get $10,950.

4.

Divide the value of your personal allowances by the number of pay periods per year. For example, if you are paid weekly, you would divide by 52 while if you were paid monthly, you would divide by 12. Continuing the example, if you were paid monthly you would divide $10,950 by 12 to get $912.50.

5.

Subtract the value of your allowances per pay period from your salary per pay period. For example, if you earned $2,800 each month, you would subtract $912.50 from $2,800 to get $1,887.50.

6.

Use the appropriate federal income tax withholding tables based on your filing status and pay period. Continuing the example, if you were single you would use the monthly payroll period single tax withholding table to find that with $1,887.50 subject to withholding, you would have $189.28 withheld for federal taxes.

7.

Contact your state and local departments of revenue to find out if your paycheck is subject to state and local income taxes. These rates vary by state and locality.

8.

Subtract the amount of payroll taxes, federal income taxes and, if applicable, state and local income taxes from your salary to determine how much take-home pay you will get to keep each pay period.



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