An employer sponsored retirement savings account could be one of your best tools for creating a secure retirement. It provides two important advantages. First, all contributions and earnings are tax deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to your account, which can range from 0% to 100% of your contributions. Use this calculator to see how increasing your contributions to a 401(k), 403(b) or 457 plan can affect your paycheck as well as your retirement savings. This calculator has been updated to use the new withholding schedules for 2008.
Definitions
- Gross pay
- This is your gross pay, before any deductions, for the pay period.
Please enter a dollar amount from $1 to $1,000,000.
- Pay period
- This is how often you are paid. Your selections are: Weekly (52 paychecks per year), Every other week (26 paychecks per year), Twice a month (24 paychecks per year), and Monthly (12 paychecks per year).
- Filing status
- This is your income tax filing status. The choices are "Single" and "Married".
Choose "Married" if you are married or file as "head of household". Choose "Single" if you file your taxes as a single person or if you are married but file separately.
- Number of allowances
- When your Federal income tax withholdings are calculated, you are allowed to claim allowances to reduce the amount of the Federal income tax withholding. In 2008, each allowance you claim is equal to $3,500 of income that you expect to have in deductions when you file your annual tax return. The number of allowances you should claim depends largely on the number of dependents you have and your itemized deductions. This calculator allows from 0 to 99 allowances.
- State and Local Taxes
- This is the percentage that will be deducted for state and local taxes. We take your gross pay, minus $3,500 per allowance, times this percentage to calculate your estimated state and local taxes. Please note, this calculator can only estimate your state and local withholdings.
- Pre-tax deductions
- Enter any payroll deductions made by your employer that are made with pre-tax income. This might include your health insurance, life insurance among other pre-tax deductions.
- Post-tax deductions
- Enter any payroll deductions made by your employer that are made with after tax income.
- Post-tax reimbursements
- Enter any reimbursements made by your employer that are after tax.
- Year to date income
- Income from your employer that you have been paid during the current year, before the current payroll period. We use this amount to determine if you are still required to pay FICA OASDI for the current payroll period.
- FICA OASDI
- FICA Old Age Survivors and Disability Insurance. FICA OASDI is calculated as your gross earnings times 6.2%. Please note that this calculator does not make any assumptions as to the total FICA OASDI paid for the current year. For 2008, incomes over $102,000 that have already had the maximum FICA OASDI amount of $6,324.00 withheld will not have additional FICA OASDI withholdings.
- FICA Medicare
- FICA Medicare is calculated as the gross earnings times 1.45%. Unlike FICA OASDI there is no annual limit to FICA Medicare deductions.
- Federal tax withholding calculations
- Federal income tax withholdings were calculated by:
- Multiplying taxable gross wages by the number of pay periods per year to compute your annual wage.
- Subtracting the value of allowances allowed (for 2008, this is $3,500 multiplied by withholding allowances claimed).
- Determining your annual tax by using the tables below (single and married rates, respectively).
- Dividing the amount of tax by the number of pay periods per year to arrive at the amount of federal withholding tax to be deducted per pay period.
Single Withholding Rates*
Annual taxable income between these amounts |
Annual withholding |
Withhold additional % of income over this amount |
$0.00 |
$2,650.00 |
$0.00 |
|
|
$2,650.00 |
$10,300.00 |
$0.00 |
10% |
$2,650.00 |
$10,300.00 |
$33,960.00 |
$765.00 |
15% |
$10,300.00 |
$33,960.00 |
$79,725.00 |
$4,314.00 |
25% |
$33,960.00 |
$79,725.00 |
$166,500.00 |
$15,755.25 |
28% |
$79,725.00 |
$166,500.00 |
$359,650.00 |
$40,052.25 |
33% |
$166,500.00 |
$359,650.00 |
(no limit) |
$103,791.75 |
35% |
$359,650.00 |
*This information is from IRS Publication 15, Rev. January 2008, for wages paid in 2008. |
Married Withholding Rates*
| |
