The order of the deductions
Pre-tax deductions come off first. A traditional 401(k) contribution and Section 125 benefits such as health, dental and HSA contributions reduce both income tax and FICA, which is why they are the cheapest dollars you can save.
Taxable income is then gross pay minus pre-tax deductions minus the standard deduction. Federal income tax is calculated bracket by bracket on what remains: only the income inside each band is taxed at that band’s rate, so crossing into a higher bracket taxes only the dollars above the line, never the ones below it.
That order is why the first dollar you put into a pre-tax plan is worth more than the last one: it drops out of taxable income first and, because FICA applies to wages themselves, it even lowers the Social Security and Medicare bill.
FICA: the flat part of the bill
Social Security takes 6.2% of wages up to $184,500 in 2026, and Medicare takes 1.45% of everything with no cap. Wages above $200,000 (single) or $250,000 (married filing jointly) also attract the 0.9% Additional Medicare tax.
Because FICA applies from the first dollar, it is the reason a low-income paycheck still has tax taken out of it even when the income tax is zero. Unlike the income tax there is no standard deduction sheltering the FICA base - it is charged on wages themselves, which is why the two lines behave so differently as income changes.
Why your actual paycheck will differ
Employers withhold using the IRS percentage-method tables in Publication 15-T, which apply the standard deduction and bracket rates to each pay period rather than to an annualised figure. Bonuses, overtime, mid-year raises and the assumptions on your Form W-4 all shift the result.
State tax is a flat rate you supply here. Real state systems are progressive with their own deductions and credits, and a few states and cities levy no income tax at all, so treat the state line as an order-of-magnitude estimate.
The refund is not a saving
Withholding is a deposit, not a bill. If the percentage-method tables take more across the year than your actual liability, the difference comes back at filing - and a large refund means the government held your money interest-free rather than that you saved anything.
The other direction is the one worth checking: a second job, a mid-year raise, a bonus or a spouse starting work can each leave too little withheld, and the tax due in April is the same either way. The fix is a new Form W-4, not a different calculation. An estimate, not a return, and not tax advice.
Reading a pay stub line by line
A pay stub is laid out in the order the arithmetic happens: gross pay for the period, then pre-tax deductions, then the taxable gross those deductions leave behind, then the tax lines, then post-tax deductions, then net. When a stub and this page disagree, compare the taxable gross first rather than the net, because most differences start there.
Some pay arrives in the gross and in the tax base but never in the bank in the shape you expect. Imputed income for group term life cover, the personal use of a company car and vested stock are all taxed as wages without being cash, so they raise withholding without raising the deposit - which is why a month with a vest can feel as though the rate doubled.
Bonuses and commissions are withheld at the flat 22% supplemental rate rather than at your own bracket, and a large one can push a single period into a higher row of the percentage-method tables. That is a withholding rule, not a tax rate: the difference is settled at filing, which is the same reason the first checks after a mid-year raise look smaller than the arithmetic suggests.
Danfio