About the Salary Calculator

Some information about the figures used to generate the answers displayed in The Salary Calculator:

Federal Income Tax

The Salary Calculator uses Income tax information from the tax year 2018 to calculate the deductions made on a salary. Although we have tried to make this site accurate, it is by no means infallible, and is not intended to give you your exact tax data. Because of the number of variables involved, this site can't do the job of Form 1040. The main considerations are included, others are not, but we hope that most people will be able to get a good approximation of what their employer will withhold.

Federal Income tax is paid only on TAXABLE income, which is however much of your salary is left after the deductions have been made. Details of the deductions included in this site, and the tax bands, below.

Deductions

Single$10,650
Married Joint$21,300
Married Separate$10,650
Head of House$13,700
  
Each Dependent$4,150

Deductions are calculated according to how many dependents you have (excluding yourself and your spouse). There is a standard deduction for each filing status, and a personal exemption for each individual, which are added together to give this deduction.

For single filing status, the this deduction is $10,650. If you are married and filing a joint return, the deduction is $21,300. If you are married and filing separate returns, the deduction is $10,650. If you are the head of the household, the deduction is $13,700.

On top of this, for each dependent you list as an exemption, you get an additional $4,150 deducted.

Other Deductions

The "Other Monthly Deductions" allows you to enter a $ value for any other amount you wish to have included as a deduction. This is so you can compensate for things such as retirement plan contributions, which are tax free. Any value you enter in here (the monthly deduction) is multiplied by 12, and then included in the deductions to find the taxable pay. Whatever you enter into this field is also subtracted from the take-home pay value - because contributions of this type are not coming home with you.

PEP and Pease

PEP Thresholds
Single$266,700
Married Joint$320,000
Married Separate$160,000
Head of House$293,350
Phaseout Rate2%
For each$2,500

Re-introduced in 2013, PEP and Pease are two ways in which tax deductions are reduced for higher earners, effectively increasing the tax you pay. PEP is short for Personal Exemption Phaseout and reduces the amount deductible for each dependent (including yourself and your spouse). Pease is named after the congressman who introduced it originally, and reduces the amount of "Other deductions" that you can deduct from your salary.

By default, you can deduct $4,150 for yourself, your spouse (if filing a joint return) and each of your dependents from your salary before paying tax. However, if you earn more than the PEP threshold (different for each filing status, listed in the table to the right, you will lose 2% of these exemptions for each $2,500 ($1,250 for married filing separately), or part thereof, that you earn over the threshold. If you earn enough, the personal exemptions will be reduced to zero (although you will keep the remainder of the standard deduction).

Pease Thresholds
Single$266,700
Married Joint$320,000
Married Separate$160,000
Head of House$293,350
Phaseout Rate3%
Phaseout Max80%

Pease reduces the deductible amount of "Other deductions" at a rate of 3 cents for each dollar you earn over the Pease threshold, which is different for each filing status (see the table to the right). These deductions are never reduced completely to zero, however - Pease deduction phaseouts are limited to 80% of the total deductions.

In fact, some itemised deductions are not susceptible to reduction under the Pease code, but for the purposes of calculations on this website, all deductions are affected by Pease.

Single

Up toTax Rate
$ 9,52510%
$ 38,70015%
$ 93,70025%
$ 195,45028%
$ 424,95033%
$ 426,70035%
Over $ 426,70039.6%

If your filing status is "single", the standard deduction is $10650.

The first tax band covers annual TAXABLE income (i.e., after deductions) from $0 to $9,525. On this band, you will pay 10% income tax. From $9,525 to $38,700 the tax rate is 15%. From $38,700 to $93,700 the tax rate is 25%. From $93,700 to $195,450 the tax rate is 28%. From $195,450 to $424,950 the tax rate is 33%. From $424,950 to $426,700 the tax rate is 35%.

Anything earned over $426,700 is taxed at the maximum 39.6%.

Joint Married

Up toTax Rate
$ 19,05010%
$ 77,40015%
$ 156,15025%
$ 237,95028%
$ 424,95033%
$ 480,05035%
Over $ 480,05039.6%

If you are a married couple filing a joint return, the standard deduction is $21300.

The first tax band covers annual TAXABLE income (i.e., after deductions) from $0 to $19,050. On this band, you will pay 10% income tax. From $19,050 to $77,400 the tax rate is 15%. From $77,400 to $156,150 the tax rate is 25%. From $156,150 to $237,950 the tax rate is 28%. From $237,950 to $424,950 the tax rate is 33%. From $424,950 to $480,050 the tax rate is 35%.

Anything earned over $480,050 is taxed at the maximum 39.6%.

Married Filing Separate

Up toTax Rate
$ 9,52510%
$ 38,70015%
$ 78,07525%
$ 118,97528%
$ 212,47533%
$ 240,02535%
Over $ 240,02539.6%

If you are married, but filing a separate return, the standard deduction is $10650.

The first tax band covers annual TAXABLE income (i.e., after deductions) from $0 to $9,525. On this band, you will pay 10% income tax. From $9,525 to $38,700 the tax rate is 15%. From $38,700 to $78,075 the tax rate is 25%. From $78,075 to $118,975 the tax rate is 28%. From $118,975 to $212,475 the tax rate is 33%. From $212,475 to $240,025 the tax rate is 35%.

Anything earned over $240,025 is taxed at the maximum 39.6%.

Head of Household

Up toTax Rate
$ 13,60010%
$ 51,85015%
$ 133,85025%
$ 216,70028%
$ 424,95033%
$ 453,35035%
Over $ 453,35039.6%

If you are the head of a household, the standard deduction is $13700.

The first tax band covers annual TAXABLE income (i.e., after deductions) from $0 to $13,600. On this band, you will pay 10% income tax. From $13,600 to $51,850 the tax rate is 15%. From $51,850 to $133,850 the tax rate is 25%. From $133,850 to $216,700 the tax rate is 28%. From $216,700 to $424,950 the tax rate is 33%. From $424,950 to $453,350 the tax rate is 35%.

Anything earned over $453,350 is taxed at the maximum 39.6%.

Alternative Minimum Tax

AMT Exemption Amounts
Single$55,400
Married Joint$86,200
Married Separate$43,100
Head of House$55,400
AMT Phaseout Thresholds
Single$123,100
Married Joint$164,100
Married Separate$82,050
Head of House$123,100
AMT Tax Rate Thresholds
Single$191,500
Married Joint$191,500
Married Separate$95,750
Head of House$191,500
AMT Tax Rates
Below threshold26%
Above threshold28%

Alternative Minimum Tax, or AMT, is charged only if the normally-calculated federal income tax is below a minimum tax value known as the Tentative Minimum Tax, or TMT. If you have a large value of deductions on your federal income tax, you might reduce your federal tax below the TMT and have to pay the difference as AMT.

Normal standard deductions and other deductions don't apply when calculating AMT. Everyone has a separate AMT exemption, below which no TMT is calculated. For single filers, this exemption is $55,400, for married joint filers it is $86,200, for married couples filing separately it is $43,100 and it is $55,400 for the head of household.

This exemption is reduced ("phased out") if your income is above the applicable phaseout threshold, listed in the table to the right. The exemption is reduced by 25 cents for each dollar of income over the phaseout threshold until it reaches zero - or, in the case of married filing separately, the exemption can be further reduced to a negative value equal to the original exemption.

Once the exemption has been calculated, it is deducted from the total income. This value is then used to work out the TMT, charged at 26% under the applicable tax rate threshold (listed to the right) and 28% above this threshold.

If the TMT is greater than the federal income tax which has been calculated according to the normal rules, AMT is applied. AMT is calculated as the difference between the TMT and the federal income tax - so you never pay less than the TMT.

Social Security

OASDI portion6.2%
upto a maximum$7,979.40/year
Medicare portion1.45%
Additional Medicare0.9%

Social Security for employees is calculated as the OASDI (Old Age, Survivors and Disability Insurance) portion of 6.2% of income up to $128,700 plus the Medicare portion of 1.45% of all earnings. For the tax year 2018, this means that the maximum OASDI contribution is $7,979.40. There is no maximum for the Medicare portion.

In 2013, an additional Medicare tax was introduced on high income earners. Employers are required to withold an additional 0.9% of any income over the additional Medicare threshold. For single filers, this threshold is $200,000. For married couples filing a joint return, this threshold is $250,000, for married separate returns the threshold is $125,000 and for the head of household it is $200,000.

State Income Tax

This site does not currently calculate state income tax, but the line has been left in the table to indicate that it is something to be considered when looking at these figures. In the future, we hope to be able to integrate it into the site.

Mortgage Calculations

The Mortgage Repayment Calculator uses an iterative process to home in a repayment amount that completes the mortgage after the entered time period has passed. It also does not include any information about building society fees, or variable rates.

For these reasons, The Mortgage Repayment Calculator is intended just to provide a ballpark figure to allow you to get an idea of the costs of different interest rates etc. Care has been taken to try to make these values accurate, but figures from mortgage lendors are likely to differ.

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