Paycheck Deductions Explained 2026

Paycheck Deductions Explained: Where Your Money Goes

Confused by your pay stub? This guide breaks down every paycheck deduction — taxes, FICA, retirement and benefits. Enter your salary to see a full gross-to-net breakdown for 2026.

● Every deduction explained ● Pre-tax vs post-tax ● 2026 federal data

📄 Your deductions

Reading your pay stub

The deductions on every US paycheck

Your gross pay is what you earn; your net pay (take-home) is what lands in your account. Between them sits a stack of deductions. They fall into two groups: mandatory taxes and voluntary benefits.

Mandatory tax deductions

Federal income tax — based on your W-4, filing status and the 2026 brackets, after the standard deduction.
Social Security (6.2%) — on wages up to the $184,500 cap.
Medicare (1.45%) — on all wages, plus 0.9% extra above $200k/$250k.
State & local income tax — varies by state; nine states have none. Check your state page.

Pre-tax vs. post-tax voluntary deductions

Pre-tax deductions (traditional 401(k), HSA, most health-insurance premiums) come out before income tax, lowering your taxable wages. Post-tax deductions (Roth 401(k), disability insurance, garnishments) come out after tax. Pre-tax items are why two people with the same salary can have very different take-home pay.

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Pre-tax saves twice: A pre-tax health premium or 401(k) reduces both your taxable income and, for Section-125 health plans, sometimes FICA too — stretching every benefit dollar further.

To compare scenarios or add a 401(k), use our 401(k) calculator or the full paycheck calculator.

Paycheck Deductions Explained FAQ

What gets deducted from my paycheck?

Mandatory deductions are federal income tax, Social Security (6.2%), Medicare (1.45%) and state/local income tax where applicable. Voluntary deductions include 401(k), HSA, health insurance and other benefits, which can be pre-tax or post-tax.

What is the difference between pre-tax and post-tax deductions?

Pre-tax deductions (traditional 401(k), HSA, most health premiums) are subtracted before income tax is calculated, lowering your taxable income. Post-tax deductions (Roth 401(k), some insurance) come out after tax and do not reduce taxable income.

Why is my take-home pay so much lower than my salary?

Between federal tax, 7.65% FICA, state tax and benefit deductions, a typical worker keeps roughly 70–80% of gross. The exact figure depends on your bracket, state and pre-tax elections — enter your salary above to see your breakdown.

Do health insurance premiums lower my taxes?

Usually yes. Most employer health premiums are paid pre-tax under a Section 125 plan, which lowers both your taxable income and, in many cases, your FICA wages — making them one of the most tax-efficient deductions.