What percentage tax is taken out of your paycheck depends on your income level, filing status, and location, but typically ranges from 7.65% to over 20% combined for federal income tax, Social Security, and Medicare. These deductions are calculated based on IRS guidelines and your W-4 form.
Federal income tax is withheld based on your taxable income and the allowances you claim on your W-4. For most U.S. workers, this rate increases progressively as income rises. In 2024, federal income tax brackets range from 10% to 37%, depending on your filing status and earnings. A single filer earning $50,000 pays 12% on income above $11,000, while someone earning $200,000 pays 24% on income between $95,376 and $200,000.
Social Security and Medicare taxes are mandatory and split evenly between employer and employee. The Social Security portion is 6.2% of wages up to $168,600 in 2024. Medicare is 1.45% on all wages, with an additional 0.9% surtax on earnings over $200,000 for single filers. Together, these make up the FICA tax, which totals 7.65% for most employees.
Employers use IRS Publication 15-T to calculate federal income tax withholding. This publication includes tables based on pay frequency (weekly, biweekly, monthly), filing status, and number of allowances claimed. For example, a single worker paid weekly with one allowance claiming $50,000 annually has a federal income tax withholding of approximately $165 per week.
State and local taxes further affect take-home pay. California imposes a state income tax ranging from 1% to 12.3%, while New York's rate goes up to 10.9%. Some cities, like San Francisco, add local income taxes up to 1.5%. These taxes are deducted separately from federal and FICA withholdings.
For a full-time employee earning $60,000 annually, the breakdown is roughly: $9,120 in federal income tax (15.2%), $3,720 in Social Security (6.2%), $870 in Medicare (1.45%), and $1,160 in California state tax (1.93%). Total deductions amount to $14,870, or 24.8% of gross pay.
The following table outlines the standard tax categories withheld from U.S. paychecks in 2024:
| Tax Type | Rate | Wage Cap | Who Pays |
|---|---|---|---|
| Federal Income Tax | 10%-37% | None | Employee only |
| Social Security (FICA) | 6.2% | $168,600 | Employee and employer |
| Medicare (FICA) | 1.45% | None | Employee and employer |
| Additional Medicare Surcharge | 0.9% | None (applies above $200k) | Employee only |
| State Income Tax | Varies (0%-13.3%) | Varies | Employee only |
Medicare tax is often misunderstood. While both employees and employers contribute 1.45%, the employee's share is deducted from their paycheck. The additional 0.9% Medicare surtax applies only to income above $200,000 for single filers and $250,000 for joint filers. This surtax is not matched by the employer.
A common mistake is assuming all taxes are withheld at a flat rate. In reality, federal income tax is progressive-higher earners pay more on each dollar earned above a threshold. For example, a person earning $75,000 pays 12% on income between $11,001 and $44,725, and 22% on income above that.
Many people assume that the 7.65% FICA rate is the total tax taken out. That's incorrect. FICA covers only Social Security and Medicare. Federal income tax is separate and can exceed FICA for higher earners. A worker making $150,000 may have over $30,000 withheld in total taxes, with federal income tax being the largest component.
Another misconception is that tax withholding equals actual tax liability. Withholding is an estimate. Workers may owe more or receive a refund when filing taxes. The IRS estimates that 70% of taxpayers receive a refund, meaning they overpaid during the year.
One non-obvious fact: the IRS allows employers to use the "percentage method" for calculating federal income tax withholding. This method uses a flat percentage based on the employee's pay period and number of allowances. It's faster than using IRS tables and is used by many small businesses.
Consider a single, full-time employee in Austin, Texas, earning $65,000 annually. They claim one allowance on their W-4. Their weekly paycheck is $1,250.
Breakdown of deductions:
Total deductions: $220.63. Net pay: $1,029.37. Combined tax rate: 17.65% of gross pay.
This example shows that even without state tax, federal income tax and FICA together make up nearly 18% of take-home pay. The actual percentage varies based on filing status, allowances, and location.
Understanding what percentage tax is taken out of your paycheck helps you plan your budget and adjust your W-4 if needed. If you're under-withholding, you may face a large tax bill in April. Over-withholding means you're lending money to the government interest-free.