Mandatory Paycheck Deductions (2026 Rates)
Every W-2 employee has mandatory deductions that fund federal and state programs. These are not optional and are calculated based on your earnings and W-4 filing status.
| Deduction | Rate | Wage Limit | Annual Max |
|---|---|---|---|
| Federal income tax | 10% – 37% | None | Varies |
| Social Security (OASDI) | 6.2% | $176,100 | $10,918 |
| Medicare (HI) | 1.45% | None | No max |
| Additional Medicare | 0.9% | Above $200K | No max |
| State income tax | 0% – 13.3% | Varies | Varies |
Federal Income Tax Withholding
Your employer uses your W-4 form to calculate federal income tax withholding. The 2026 tax brackets for single filers are:
- 10% on income up to $11,925
- 12% on $11,926 to $48,475
- 22% on $48,476 to $103,350
- 24% on $103,351 to $197,300
- 32% on $197,301 to $250,525
- 35% on $250,526 to $626,350
- 37% on income above $626,350
These are marginal rates — only income in each bracket is taxed at that rate, not your entire income. Use our salary calculator to see your exact federal withholding based on your W-4 selections.
FICA Taxes: Social Security and Medicare
FICA taxes fund Social Security retirement benefits and Medicare health coverage. Combined, they take 7.65% of your gross pay (your employer pays a matching 7.65%). Social Security stops at the wage base ($176,100 in 2026), but Medicare has no cap and adds a 0.9% surtax above $200,000.
For self-employed workers, FICA is even higher — they pay both the employee and employer shares (15.3% total). See our W-2 vs 1099 guide for a complete comparison. You can also check the self-employment tax calculator on LevyIO.
Pre-Tax vs Post-Tax Deductions
Understanding the difference saves you money:
| Pre-Tax Deductions | Post-Tax Deductions |
|---|---|
| Traditional 401(k) contributions | Roth 401(k) contributions |
| Health insurance premiums | Life insurance (over $50K coverage) |
| HSA contributions | Union dues |
| FSA contributions | Wage garnishments |
| Commuter benefits | Charitable donations (via payroll) |
Pre-tax deductions reduce your taxable income. If you are in the 22% bracket, every $100 in pre-tax deductions saves you $22 in federal taxes plus state taxes. This is why maximizing pre-tax contributions (401k, HSA) is one of the most effective tax strategies for W-2 employees.
States With No Income Tax
Nine states have no state income tax, which can significantly increase your take-home pay:
- Alaska, Florida, Nevada, New Hampshire (dividends/interest only), South Dakota, Tennessee, Texas, Washington, Wyoming
For a worker earning $100,000, living in a no-tax state vs. California (13.3% top rate) could save $6,000 to $8,000 per year in state taxes. Compare states with our state income tax comparison.
Frequently Asked Questions
What percentage of my paycheck goes to taxes?
Total tax burden is typically 20-35% for most workers, including federal (10-37%), Social Security (6.2%), Medicare (1.45%), and state taxes (0-13.3%).
What is FICA tax and how much is it?
FICA is 7.65% of your wages: 6.2% Social Security (up to $176,100) + 1.45% Medicare (all wages). An extra 0.9% Medicare applies above $200,000.
What are pre-tax vs post-tax deductions?
Pre-tax deductions (401k, health insurance, HSA) reduce taxable income, saving you money. Post-tax deductions (Roth 401k, garnishments) are taken after taxes and do not reduce your current tax liability.