If you get a new job, knowing your salary is nice, but it's not necessarily reflective of how much money you're actually going to bring home. If you know your salary, exemptions, filing status, and other withholdings, you can figure out how much you'll bring home per month.
First step: figure out your after-tax income
Income taxes are much easier to figure out on an annual basis, so let's start there. The amount of federal income taxes withheld from your paycheck is based on three factors:- Your salary (which determines your tax bracket).
- How you fill out IRS Form W-4 (which includes income from other means than your primary job, as well as any projected deductions).
- Your filing status (single, married filing jointly, etc.).
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| FILING STATUS | STANDARD DEDUCTION |
|---|---|
| Single | $12,950 |
| Married filing jointly or qualifying widow(er) | $25,900 |
| Married filing separately | $12,950 |
| Head of household | $19,400 |
| IF YOU ARE A SINGLE FILER AND YOUR TAXABLE INCOME IS... | YOUR FEDERAL INCOME TAX WILL BE... | IF YOU ARE A MARRIED JOINT FILER AND YOUR INCOME IS... | YOUR FEDERAL INCOME TAX WILL BE… |
|---|---|---|---|
| $0 to $10,725 | 10% of your taxable income | $0 to $20,550 | 10% of your taxable income |
| $10,276 to $41,775 | $1,027.50 + 12% of the income over $10,275 | $20,551 to $83,550 | $2,055 + 12% of the amount over $20,550 |
| $41,776 to $89,075 | $4,807.50 + 22% of the income over $41,775 | $83,551 to $178,150 | $9,615 + 22% of the amount over $83,550 |
| $89,076 to $170,050 | $15,213.50 + 24% of the income over $89,075 | $178,151 to $340,100 | $30,427 + 24% of the amount over $178,150 |
| $170,051 to $215,950 | $34,647.50 + 32% of the income over $170,050 | $340,101 to $431,900 | $69,295 + 32% of the amount over $340,100 |
| $215,951 to $539,900 | $49,335.50 + 35% of the income over $215,950 | $431,901 to $647,850 | $98,671 + 35% of the amount over $431,900 |
| $539,901 or more | $162,718 + 37% of the income over $539,900 | $647,851 or more | $174,253.50 + 37% of the amount over $647,850 |
- Your retirement contributions (usually a percentage of your monthly salary).
- Benefits (health/dental/vision insurance, life insurance, etc.).
- Union dues.
- Any wage garnishments.
An example
To illustrate this, let's consider an example, albeit an oversimplified one. Let's say that you just got a new job with a starting salary of $100,000. For this calculation, we'll assume you are single and take the standard deduction. You have agreed to contribute 5% of your salary to your new employer's 401(k) on a pre-tax basis, and your employer pays $5,000 worth of medical premiums on your behalf. So your taxable income is:| SALARY | $100,000 |
|---|---|
| Pre-tax retirement savings (5% of salary) | -$5,000 |
| Health insurance premiums | -$5,000 |
| Standard deduction | -$12,950 |
| Taxable income | $77,050 |
| FEDERAL INCOME TAX | $12,568 |
|---|---|
| Social Security tax | $4,777.10 |
| Medicare tax | $1,117.23 |
| Total taxes | $18,462.33 |
| MONTHLY SALARY | $8,333.33 |
|---|---|
| Payroll deductions | -$833.33 |
| Taxes | -$1,538.53 |
| Take home pay (monthly) | $5,961.47 |
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