🇺🇸 United States Salary Tax Calculator

The United States operates a progressive federal income tax system where tax rates increase as income rises. The Internal Revenue Service (IRS) administers the tax code, which includes seven tax brackets ranging from 10% to 37% for the 2026 tax year. This system is designed to ensure that those with higher incomes contribute a larger percentage of their earnings to federal revenue, while providing relief for lower-income households through lower tax rates and various credits. Federal income tax is calculated using marginal tax brackets, meaning different portions of your income are taxed at different rates. For example, if you earn $75,000 annually, the first portion of your income falls into lower brackets, and only the amount exceeding each bracket threshold is taxed at the higher rate. This progressive structure ensures that lower-income earners pay a smaller percentage of their income in taxes compared to higher earners. Understanding marginal tax rates is crucial because your effective tax rate—the percentage of your total income paid in taxes—is typically lower than your top marginal rate. In addition to federal income tax, most employees also pay Social Security and Medicare taxes, commonly referred to as FICA taxes. Social Security tax is levied at 6.2% on wages up to a certain cap (the Social Security wage base), which adjusts annually for inflation. This cap means that once you reach the wage base limit, no additional Social Security tax is withheld for the remainder of the year. Medicare tax is charged at 1.45% on all wages with no cap, meaning high earners continue paying Medicare tax on their entire income. High earners may also be subject to an additional 0.9% Medicare surtax on income above specific thresholds, which applies to wages, self-employment income, and other compensation. The standard deduction is a key feature of the US tax system, allowing taxpayers to reduce their taxable income without itemizing deductions. For 2026, the standard deduction amounts are adjusted for inflation and vary by filing status—single, married filing jointly, married filing separately, and head of household each have different amounts. This deduction effectively exempts a portion of income from taxation, making the effective tax rate lower than the marginal rate for many taxpayers. Taxpayers can choose between taking the standard deduction or itemizing deductions such as mortgage interest, state and local taxes, and charitable contributions, whichever provides the greater tax benefit. Tax withholding occurs throughout the year via payroll deductions, where employers withhold estimated taxes from each paycheck based on information provided on Form W-4. This form allows employees to specify their filing status, number of dependents, and other factors that affect tax liability. At the end of the tax year, taxpayers file an annual return to reconcile their actual tax liability with the amounts withheld. If too much was withheld, taxpayers receive a refund; if too little, they must pay the difference. The goal is to have withholding match actual tax liability as closely as possible to avoid large refunds or unexpected tax bills. The US tax system also includes various credits and deductions that can further reduce tax liability. These include the Earned Income Tax Credit (EITC) for low to moderate-income workers, child tax credits, education credits, and deductions for retirement contributions, among others. Tax credits are particularly valuable because they reduce tax liability dollar-for-dollar, while deductions reduce taxable income. However, this calculator focuses on the basic federal income tax and FICA contributions, providing a baseline estimate before accounting for these additional factors. It's important to note that state and local taxes are not included in federal calculations. Many states impose their own income taxes, which can range from flat rates to progressive structures similar to the federal system. Some states, like Texas and Florida, have no state income tax, while others like California and New York have relatively high state tax rates. Local jurisdictions may also levy additional income taxes, particularly in major metropolitan areas. These state and local taxes can significantly impact total tax burden, sometimes adding several percentage points to the effective tax rate. The tax code undergoes periodic changes through legislation, and rates and brackets are adjusted for inflation annually using the Consumer Price Index. Taxpayers should consult the most current IRS publications or a qualified tax professional for advice specific to their situation, as individual circumstances can vary significantly based on filing status, dependents, deductions, and other factors. The complexity of the US tax system means that two individuals with the same gross income may have very different net incomes depending on their specific situation.