How much are your employees’ wages after taxes? This powerful tool does all the gross-to-net calculations to estimate take-home pay in all 50 states. For more information, see our Free Online Net income Calculator.
Important note on the net income calculator: The calculator on this page is provided through the ADP Employer Resource Center and is designed to provide general guidance and estimates. It should not be relied upon to calculate exact taxes, payroll, or other financial data. These calculators are not intended to provide tax or legal advice and do not represent any ADP service or solution. You should refer to a professional advisor or accountant regarding any specific requirements or concerns.
Net Income calculator guide
Although our net income calculator does much of the heavy lifting, it may be helpful to take a closer look at a few of the calculations that are essential to payroll.
How to calculate net income
- Determine taxable income by deducting any pre-tax contributions to benefits
- Withhold all applicable taxes (federal, state and local)
- Deduct any post-tax contributions to benefits
- Garnish wages, if necessary
- The result is net income
How to calculate annual income
To calculate an annual salary, multiply the gross pay (before tax deductions) by the number of pay periods per year. For example, if an employee earns $1,500 per week, the individual’s annual income would be 1,500 x 52 = $78,000.
How to calculate taxes taken out of a paycheck
- Refer to employee withholding certificates and current tax brackets to calculate federal income tax
- Determine if state income tax and other state and local taxes and withholdings apply
- Divide the sum of all applicable taxes by the employee’s gross pay
- The result is the percentage of taxes deducted from a paycheck
Calculations, however, are just one piece of the larger paycheck picture.
What is a paycheck?
A paycheck is how businesses compensate employees for their work. The most common delivery schedules are bi-weekly and semi-monthly, though this varies based on employer preferences and applicable state laws and regulations. Business-specific requirements, such as collective bargaining agreements covering union employees, may also dictate paycheck frequency.
Types of paychecks
Traditionally, employees received printed checks in person or by mail, but more often today, the money is electronically deposited into a bank account. Some employers may also offer optional alternatives to paycheck, which can be advantageous to unbanked workers.
How to read a paycheck
Unlike withholding certificates and other employment documents, paychecks are pretty easy to decipher. Reading them is simply a matter of making sure the payment information is correct.