US Tax System Explained
Understanding how US taxes work is crucial for accurate salary calculations. The US tax system includes:
- 1Federal Income Tax: Progressive tax brackets from 10% to 37% based on income and filing status
- 2State Income Tax: Varies by state, from 0% (Texas, Florida) to 13% (California)
- 3FICA Taxes: Social Security (6.2%) and Medicare (1.45%) are mandatory payroll taxes
What Gets Deducted From Your Salary?
When you receive your paycheck, several deductions are automatically taken out:
Federal Income Tax
Calculated using progressive brackets based on your income level and filing status (Single, Married, Head of Household).
State Income Tax
Varies by state. Some states have no income tax, while others have rates up to 13%.
FICA Taxes (Social Security & Medicare)
Social Security (6.2%) and Medicare (1.45%) are mandatory. Your employer matches these contributions.
What to Do With Your Net Salary?
Knowing your take-home amount is just the first step. For financial peace of mind, use VNIT's tool ecosystem:
Frequently Asked Questions
💡How is federal income tax calculated?
Federal income tax in the US uses a progressive tax system with multiple brackets. Different portions of your income are taxed at different rates, ranging from 10% to 37% depending on your income level and filing status.
🗺️How does state tax work?
State income tax varies by state. Some states (like Texas and Florida) have no state income tax, while others have rates ranging from 1% to 13%. The calculator uses the current tax rates for each state.
💼What's the difference between gross and net salary?
Gross salary is your total salary before any deductions (taxes, Social Security, Medicare). Net salary is your take-home pay after all deductions. The difference includes federal tax, state tax, Social Security (6.2%), and Medicare (1.45%).