SAVE MORE for RETIREMENT and SAVE ON TAXES.

 

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Net pay -

Current Paycheck: - Gross, - Net

New Paycheck: - Gross, - Net

Contributions to a retirement account can provide tax savings on every paycheck. This is because contributions made to a retirement account, such as a 403 (b) 401(k) or IRA, are typically made on a pre-tax basis. This means that the money contributed is not subject to income taxes at the time of contribution. As a result, the taxable income for that paycheck is reduced, potentially leading to a lower tax bill.
 
Additionally, any earnings on the contributions within the retirement account are not taxed until they are withdrawn, typically during retirement. This allows for tax-deferred growth, potentially allowing the invested funds to grow at a faster rate.
 
Another way that contributions to a retirement account can save money on taxes is through the use of tax credits. Depending on your income level and type of retirement account, you may be eligible for a tax credit for contributing to a retirement account. This can provide a direct reduction in the amount of taxes owed, rather than just a reduction in taxable income.
 
Overall, contributing to a retirement account can not only help save for retirement but also provide tax savings on every paycheck. It is important to consult with a financial advisor or tax professional to determine the best retirement account options and contribution strategies for your individual financial situation.
 
 

Use our Salary Reduction Calculator to estimate what your paycheck amount will be every month.

Federal tax withholding calculations. Federal income tax withholding was calculated by:

  1. Multiplying taxable gross wages by the number of pay periods per year to compute your annual wage.
  2. Subtracting the value of allowances allowed (for 2020, this is $4,300 multiplied by withholding allowances claimed).
  3. Determining your annual tax by using the tables below (single and married rates, respectively).
  4. Dividing the amount of tax by the number of pay periods per year to arrive at the amount of federal tax withholding to be deducted per pay period.

Single Withholding Rates 2024*

Annual taxable income between these amounts Annual withholding Withhold additional % of income over this amount
$0 – $7,300.00 $0.00
$7,300.00 – $13,100 $0.00 plus 10% of income over $7,300
$13,100 – $30,875 $580.00 plus 12% of income over $13,100
$30,875 – $57,563 $2,713.00 plus 22% of income over $30,875
$57,563 – $103,275 $8,584.25 plus 24% of income over $57,563
$103,275 – $129,163 $19,555.25 plus 32% of income over $103,275
$129,163 – $311,975 $27,839.25 plus 35% of income over $129,163
$311,975 – (no limit) $91,823.63 plus 37% of income over $311,975

Married Withholding Rates 2024*

Annual taxable income between these amounts Annual withholding Withhold additional % of income over this amount
$0 – $14,600 $0.00
$14,600 – $26,200 $0.00 plus 10% of income over $14,600
$26,200 – $61,750 $1,160.00 plus 12% of income over $26,200
$61,750 – $115,125 $5,426.00 plus 22% of income over $61,750
$115,125 – $206,550 $17,168.50 plus 24% of income over $115,125
$206,550 – $258,325 $39,110.50 plus 32% of income over $206,550
$258,325 – $380,200 $55,678.50 plus 35% of income over $258,325
$380,200 – (no limit) $98,334.75 plus 37% of income over $380,200

*While all effort to to insure the calculations are accurate please check with your human resources to confirm calculations.

Definitions

PAY PERIOD
This is how often you are paid. Your selections are: Monthly (12 paychecks per year), and Annually (one paycheck per year).
FILING STATUS
This is your income tax filing status. The choices are “Single” and “Married.” Choose “Married” if you are married or file as “Head of household.” Choose “Single” if you file your taxes as a single person or if you are married but file separately.
GROSS PAY
This is your gross pay, before any deductions, for the pay period. Please enter a dollar amount from $1 to $1,000,000.
NUMBER OF ALLOWANCES
When your Federal income tax withholding is calculated, you are allowed to claim allowances to reduce the amount of the Federal income tax withholding. In 2024, each allowance you claim is equal to $4,050 of income that you expect to have in deductions when you file your annual tax return. The number of allowances you should claim depends largely on the number of dependents you have and your itemized deductions. This calculator allows from 0 to 99 allowances.
401(K)/403(B) PLAN WITHHOLDING
This is the percent of your gross income you put into a taxable deferred retirement account such as a 401(k) or 403(b). While increasing your retirement account savings does lower your take home pay, it also lowers your Federal income tax withholding. The impact on your paycheck might be less than you think. While your plan may not have a deferral percentage limit, this calculator limits deferrals to 80% to account for FICA (Social Security and Medicare) taxes. Please note that your 401(k) or 403(b) plan contributions may be limited to less than 80% of your income. Check with your plan administrator for details. For 2024, the maximum contribution to a 401(k) or 403(b) is $23,000 per year for individuals under 50 and $30,500 for individuals 50 or older.
STATE AND LOCAL TAXES
This is the percentage that will be deducted for state and local taxes. We take your gross pay, minus $4,050 per allowance, times this percentage to calculate your estimated state and local taxes. Please note, this calculator can only estimate your state and local tax withholding. The tax rate displayed is an assumption that may or may not be relevant to your situation.