How take-home pay is calculated
Your gross salary is reduced by two main categories of deduction: income tax and social contributions (payroll taxes, national insurance, pension levies, or similar). What remains is your net take-home pay.
The exact method varies by country, but the structure is the same:
- Start with gross annual salary.
- Apply any standard allowance or deduction to find taxable income.
- Apply progressive tax brackets to taxable income to find income tax.
- Calculate social contribution(s) separately on gross (or capped) earnings.
- Subtract both from gross to get net annual pay.
Worked example: US, single filer, $80,000 gross (2025). Standard deduction: $15,750 (post-OBBBA). Taxable income: $64,250. Federal income tax: $9,048.66 (10% on first $11,925, 12% on next $36,550, 22% on remainder). Social Security: $4,960 (6.2% × $80,000). Medicare: $1,160 (1.45% × $80,000). Net take-home: $64,831.34 per year ($5,402.61/month).
Country details and tax years
United States. Tax Year 2025
Federal income tax uses seven progressive brackets (10%–37%). The 2025 standard deduction is $15,750 for single filers and $31,500 for married filing jointly. Both were raised from original 2025 amounts by the One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025).
Social contributions (employee share): Social Security at 6.2% up to a wage base of $176,100; Medicare at 1.45% on all wages; an additional 0.9% Medicare surcharge on wages above $200,000 (single) or $250,000 (married).
Tax authority: IRS.gov
United Kingdom. Tax Year 2025/26
Income tax (England, Wales, and Northern Ireland): a personal allowance of £12,570 is free of tax; the basic rate (20%) applies up to £50,270 gross; the higher rate (40%) applies up to £125,140; the additional rate (45%) applies above that. The personal allowance tapers by £1 per £2 of income above £100,000.
Employee National Insurance: 8% on earnings between £12,570 and £50,270; 2% above that.
Tax authority: HMRC (GOV.UK)
Canada. Tax Year 2025 (federal only)
The lowest federal rate was reduced from 15% to 14% effective 1 July 2025 (Bill C-4). For the full 2025 filing year, CRA uses a blended rate of 14.5% on the first bracket (up to $57,375). Higher brackets remain at 20.5%, 26%, 29%, and 33%.
A Basic Personal Amount (BPA) non-refundable credit of $16,129 × 14.5% = $2,338.71 reduces federal tax payable. CPP (Canada Pension Plan) at 5.95% on earnings above $3,500, up to YMPE of $71,300. EI (Employment Insurance) at $1.64 per $100 of insurable earnings, capped at maximum insurable earnings of $65,700.
Tax authority: CRA (canada.ca)
Australia. Tax Year 2025-26
Resident individuals pay 0% up to $18,200, then 16% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above. A Low Income Tax Offset (LITO) of up to $700 reduces tax for incomes up to $66,667. The Medicare Levy is 2% of taxable income (reduced or nil for very low incomes).
Tax authority: ATO (ato.gov.au)
India. FY 2025-26 (New Regime)
Salaried employees receive a standard deduction of ₹75,000 under the new tax regime. Income tax slabs: nil up to ₹4 lakh, 5% to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh, 30% above. A Section 87A rebate eliminates tax entirely for taxable income up to ₹12,00,000. A 4% Health and Education Cess applies on tax above the rebate threshold.
Tax authority: Income Tax Department (incometax.gov.in)
What this calculator excludes
This is a national-level estimator. The following items are out of scope:
| Country | Excluded items |
|---|---|
| United States | State and local income tax; OBBBA supplemental deductions (tips, overtime, car loan interest) |
| United Kingdom | Scottish income tax bands; student loan repayments; pension contributions; Marriage Allowance |
| Canada | Provincial and territorial income tax; Quebec EI rate; CPP2 (included here where applicable); RRSP deductions |
| Australia | Medicare Levy Surcharge (private health cover); HECS-HELP repayments; superannuation (employer-paid on top, not deducted from take-home) |
| India | Employee Provident Fund (EPF); professional tax; old regime deductions (80C, 80D, HRA, etc.) |
This is an estimate, not tax advice. Verify your position with the relevant authority: IRS (US), HMRC (UK), CRA (Canada), ATO (Australia), Income Tax Department (India).