The offer letter says $80,000. You divide by 12, expect about $6,667 a month, and the deposit comes in noticeably short. Nobody stole it — it was withheld. Once you know where the money goes, comparing job offers and reading a pay stub both get a lot easier.
Why gross salary and net pay are not the same
A pay stub has two sides: earnings and deductions. Your gross salary is the earnings figure. Your take-home pay — the deposit you actually see — is what is left after the deductions come out.
The deductions fall into four groups: pre-tax benefits, FICA, federal income tax, and state income tax. They come out in a specific order, and that order matters, because pre-tax deductions shrink the income that the tax lines are later calculated on. Subtract all four and you have your net pay.
Pre-tax deductions — the part you choose
Before any tax is calculated, certain benefits can come out of your gross pay first. The most common are a traditional 401(k) contribution and your share of health insurance premiums.
These are called pre-tax because they lower the wages that federal and state income tax are figured on. Put $400 a month into a traditional 401(k) and you are not taxed on that $400 now — so the true cost to your paycheck is less than $400. A $150 health premium works the same way.
This is the one stage of the paycheck you actively control. Two people with the same $80,000 salary can have very different take-home pay simply because one contributes 10% to a 401(k) and the other contributes nothing. Lower take-home pay here is not lost money — it is money moved into savings before tax touched it.
FICA — Social Security and Medicare
FICA is the payroll tax that funds Social Security and Medicare. It comes out of almost every paycheck, and the rates are fixed by law.
| Part | Employee rate | 2026 limit |
|---|---|---|
| Social Security | 6.2% | wages up to $184,500 |
| Medicare | 1.45% | no wage cap |
Social Security tax applies only to the first $184,500 you earn in 2026 — past that, the 6.2% stops for the rest of the calendar year. Medicare has no cap, and earners above $200,000 (single filers) pay an extra 0.9% Additional Medicare Tax on the amount over that threshold.
Your employer matches the regular 6.2% and 1.45%, but that match is the employer’s cost, not a deduction from your pay, so it does not enter your take-home math. One nuance worth knowing: FICA is calculated on your pay before federal income tax but after pre-tax health premiums — which is why those premiums save you slightly more than a 401(k) contribution of the same size.
Federal income tax — withholding and your W-4
Your employer also withholds federal income tax from every paycheck. How much depends on the Form W-4 you filed.
Filing status, the number of dependents, and any extra withholding you requested all shift the number. Two people with identical salaries can have very different federal withholding because their W-4s differ. The U.S. uses progressive brackets, so a raise is taxed at your top bracket while the rest of your income keeps its lower rates — a raise never makes your whole salary jump to a higher rate.
The amount withheld through the year is an estimate. It is reconciled when you file your tax return — overpay and you get a refund, underpay and you owe. A large refund is not a bonus; it means you lent the government money interest-free all year.
State income tax — geography changes the answer
On top of federal tax, most states levy their own income tax. This is where your home address quietly changes your paycheck.
A handful of states — including Texas, Florida, and Washington — have no state income tax at all. Others reach above 10% at the top. So the same $80,000 job can deliver meaningfully different take-home pay depending only on where you live. A relocation that looks like a lateral move on gross salary can be a raise or a pay cut on net pay.
How to see your actual take-home pay
Apply pre-tax deductions, FICA, federal withholding, and state tax, and an $80,000 salary typically lands somewhere around $4,800 to $5,300 a month, depending heavily on your state and W-4. The only way to get a precise figure is to run your own numbers.
Enter your salary in the take-home pay calculator and it returns a monthly net estimate after federal tax and FICA. If you want to check the size of a raise, the percent-change tab in the percent calculator handles year-over-year math, and the interest and mortgage calculator covers what your savings earn once they are set aside.
Compare offers by net pay, not gross
The most common mistake in salary negotiation is anchoring on the gross number. The money you live on is the net number.
Consider two real-feeling offers. Offer A is $82,000 in a state with a 5% income tax. Offer B is $80,000 in a no-income-tax state. On gross pay, A wins by $2,000. But that 5% state tax on B’s salary is roughly $4,000 a year that A’s worker pays and B’s worker does not — so on take-home pay, the “smaller” Offer B is ahead. Add a stronger 401(k) match on one side and the ranking can flip again.
That is the whole point: a comparison done on gross salary can rank two jobs in the wrong order. When you weigh an offer, convert it to take-home pay first, in the state where you will actually live. The big number on the letter is not your income — the deposit is.