The amount of tax taken out of your paycheck depends on several factors including your income level, filing status, and the tax rates that apply to your income bracket.
Federal Income Tax Withholding
- Federal income tax rates for 2024 and 2025 range from 10% to 37%, spread across seven tax brackets. Your income is taxed progressively, meaning different portions of your income are taxed at different rates, not a single flat rate on your entire paycheck
- For example, in 2025, the tax brackets for a single filer are:
- 10% on income up to $11,925
- 12% on income from $11,925 to $48,475
- 22% on income from $48,475 to $103,350
- 24%, 32%, 35%, and 37% on higher income brackets respectively
- Your employer withholds federal income tax from each paycheck based on the information you provide on your W-4 form. This withholding is an estimate of your tax liability spread over the year
Other Payroll Taxes
- Besides federal income tax, 6.2% is withheld for Social Security tax on wages up to a certain limit, and 1.45% for Medicare tax, which applies to all wages. Your employer also contributes an equal amount for Social Security and Medicare, but this does not come out of your paycheck
State and Local Taxes
- Depending on where you live, state and local income taxes may also be withheld from your paycheck. Note that 9 U.S. states do not impose a state income tax for 2024 and 2025, so in those states, you would not see state tax withheld
Example
If you earn $49,920 per year (about $26/hour for 40 hours a week), your income falls into the 22% federal tax bracket. However, because of the progressive tax system, your effective tax rate will be lower than 22% overall. Portions of your income are taxed at 10%, 12%, and 22% rates respectively, so your actual tax withheld will be less than a flat 22% of your total income
. In summary, the total tax taken out of your paycheck includes federal income tax (progressively applied), Social Security (6.2%), Medicare (1.45%), and possibly state/local taxes. The exact amount depends on your income, filing status, and location. Typically, federal income tax withholding ranges from 10% to 37% on portions of your income, with additional payroll taxes also deducted
