Gross to Net Calculator
Turning an Offer Number Into a Livable Budget
An annual salary figure is the starting point for budgeting, not the answer. Before it reaches your bank account it passes through FICA taxes, income tax withholding, retirement contributions, and any other deductions you've elected — and the gap between gross and net widens as income and pre-tax contributions grow. This calculator works entirely from annual figures, which suits comparing offers or planning a yearly budget rather than a single paycheck.
The Formula
Pre-tax contributions (entered as a percentage of salary, such as a 401(k) rate) reduce taxable income before federal and state tax apply, while FICA is calculated on gross wages regardless of pre-tax elections — Social Security and Medicare taxes don't recognize pre-tax retirement deferrals the way income tax does.
A Worked Example
| Annual Gross | Total Tax | Annual Net |
|---|---|---|
| $60,000 | $14,280.00 | $42,720.00 |
| $90,000 | $21,420.00 | $64,080.00 |
| $150,000 | $35,700.00 | $106,800.00 |
| $250,000 | $54,903.20 | $182,596.80 |
At $250,000, the Additional Medicare Tax (0.9% on wages above $200,000) begins to apply, which is part of why total tax rises faster relative to income at that level.
Where This Matters
- Comparing job offers by real take-home pay — two offers with the same gross salary can produce different net income once state tax rates and benefits differ.
- Testing retirement contribution changes — increasing a 401(k) percentage lowers current taxable income and net pay together; this shows the actual trade-off in dollars.
- Annual financial planning — working from a yearly net figure rather than a per-paycheck one when setting a savings or spending plan.
How to Use This Calculator
- Enter your annual gross salary.
- Enter estimated federal and state tax rates as percentages.
- Enter pre-tax contributions as a percentage of salary (e.g. a 401(k) rate), if applicable.
- Enter other annual deductions in dollars, if any.
- Select Calculate to see annual net pay, plus monthly and biweekly equivalents.
Related Calculations
Break the same calculation down per paycheck with the Salary Paycheck Calculator, or estimate federal withholding specifically with the Tax Withholding Calculator.