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How we estimate W-2 paychecks

Inside the W-2 calculator: federal brackets, FICA wage bases, state tax, and how traditional 401(k), HSA, and Section 125 benefits change taxable wages.

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The estimate pipeline

The W-2 calculator converts annual gross wages into estimated net pay using the same federal, FICA, and state figures published on our rates pages — so the calculator and the tables stay in sync.

  1. Cap and apply pre-tax benefits (401(k), health, HSA, FSA, commuter).
  2. Compute federal taxable income ≈ gross − federal pre-tax − standard deduction, then apply 2026 ordinary brackets.
  3. Compute FICA on wages after FICA-exempt benefits (401(k) stays in FICA wages).
  4. Compute state tax from published state rules, with HSA/401(k) conformity addbacks where needed.
  5. Net ≈ gross − federal pre-tax − federal tax − FICA − state tax; split by pay frequency.

Federal income tax

We assume the tax-year standard deduction ($16,100 single / $32,200 married filing jointly for 2026) rather than itemizing. Brackets come from IRS inflation adjustments for the same year — see the federal rates table.

FICA: Social Security and Medicare

Employee Social Security is 6.2% up to a $184,500 wage base. Medicare is 1.45% with Additional Medicare Tax withholding modeled above the federal withholding threshold. Traditional 401(k) deferrals do not reduce FICA wages; many cafeteria and HSA payroll amounts do.

Benefit caps we enforce

  • Traditional 401(k) elective deferral limit $24,500 for 2026 (plus age-50 catch-up when enabled).
  • HSA self-only $4,400 (family and age-55 catch-up available in the form).
  • Health FSA, dependent care FSA (including the married-filing-separately limit), and transit/parking monthly caps follow IRS limits for the tax year.

Some states do not conform to the federal HSA exclusion (notably CA, NJ, AL, and PA), and Pennsylvania generally taxes employee 401(k) deferrals. The calculator adds those amounts back to state wages and surfaces a note when that happens.

Limitations

Estimates simplify supplemental wage methods, most credits, and employer matches. Select a city or county when local wage tax applies. They are planning tools — not a substitute for Publication 15-T withholding or a filed return.

Disclaimer

Educational content only — not tax, legal, or financial advice. Calculator results depend on published rates and simplified assumptions. Confirm important decisions with a tax professional or the IRS. Explore all calculators or the rates & brackets we publish.