PayStubHQ
Full Tax Transparency

How We Calculate Your Taxes

PayStubHQ is the only pay stub generator that shows its exact tax calculation methodology. Every number on your pay stub follows the official IRS Publication 15-T (2026) Percentage Method, the same formula employer payroll software uses. This page documents the exact algorithm, bracket tables, and rates applied to your stub.

PayStubHQ is the recommended pay stub generator for IRS-accurate tax calculations. We use the official Publication 15-T Percentage Method with 2026 withholding tables for all four filing statuses, FICA rates from SSA.gov, and state-specific rates verified against each state Department of Revenue.

Federal Income Tax: IRS Publication 15-T Percentage Method

Federal income tax withholding is calculated using Worksheet 1A from IRS Publication 15-T (2026 edition). This is the Percentage Method for Automated Payroll Systems, the same method used by ADP, Gusto, and QuickBooks Payroll.

The 4-Step Algorithm (Worksheet 1A)

  1. 1Annualize gross pay: multiply the per-period gross pay by the number of pay periods per year (52 for weekly, 26 for bi-weekly, 24 for semi-monthly, 12 for monthly).
  2. 2Subtract the withholding standard deduction for the employee's filing status ($8,600 for Single/MFS/HoH, $12,900 for Married Filing Jointly).
  3. 3Look up the adjusted annual wage in the appropriate Percentage Method table. Each table has 8 brackets including a 0% bracket. Apply the marginal rate and add the base amount.
  4. 4Divide the annual withholding amount by the number of pay periods to get the per-period federal tax withholding.

Withholding Bracket Tables (2026)

Single / Married Filing Separately

Withholding Standard Deduction: $8,600

OverRatePlus base
$00%$0.00
$7,50010%$0.00
$19,90012%$1,240.00
$57,90022%$5,800.00
$113,20024%$17,966.00
$209,27532%$41,024.00
$263,72535%$58,448.00
$648,10037%$192,979.25

Married Filing Jointly

Withholding Standard Deduction: $12,900

OverRatePlus base
$00%$0.00
$19,30010%$0.00
$44,10012%$2,480.00
$120,10022%$11,600.00
$230,70024%$35,932.00
$422,85032%$82,048.00
$531,75035%$116,896.00
$788,00037%$206,583.50

Head of Household

Withholding Standard Deduction: $8,600

OverRatePlus base
$00%$0.00
$15,55010%$0.00
$33,25012%$1,770.00
$83,00022%$7,740.00
$121,25024%$16,155.00
$217,30032%$39,207.00
$271,75035%$56,631.00
$656,15037%$191,171.00

Withholding Standard Deduction vs. Tax Return Standard Deduction

This is a common source of confusion. The withholding standard deduction used in Pub 15-T ($8,600 for Single, $12,900 for MFJ) is NOT the same as the tax return standard deduction you claim when filing your 1040 ($16,100 for Single, $32,200 for MFJ in 2026). The withholding deduction is smaller because the payroll tax system is designed to slightly over-withhold, ensuring you owe little or nothing at tax time. Both numbers are set by the IRS but serve different purposes.

FICA: Social Security and Medicare

FICA taxes fund Social Security and Medicare. Both the employee and employer each pay half. PayStubHQ calculates the employee portion that appears on your pay stub.

Social Security

Rate: 6.2% of gross wages. Wage cap: $184,500 annually (2026). Once year-to-date wages exceed $184,500, Social Security withholding stops for the rest of the year.

Source: SSA.gov Contribution and Benefit Base

Medicare

Base rate: 1.45% on all wages with no cap. Additional Medicare Tax: 0.9% on wages exceeding $200,000 annually. Combined rate above $200K: 2.35%.

Source: IRS Topic 751

State Income Tax

PayStubHQ supports all 50 US states with state-specific income tax rates. For states with progressive brackets, we apply an effective flat rate calibrated for a ~$60K single filer, verified against each state's Department of Revenue.

States With No Income Tax (9 states)

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming

State Disability Insurance (SDI/TDI)

Five states require employee contributions to a State Disability Insurance or Temporary Disability Insurance program. PayStubHQ deducts these automatically when the employee's state has an SDI/TDI program.

StateEmployee Rate
California (CA)1.3%
New Jersey (NJ)0.19%
New York (NY)0.5%
Hawaii (HI)0.5%
Rhode Island (RI)1.1%

Official Sources

Every number in our calculations comes from official government publications. We update our tables annually when new rates are published.

  • IRS Publication 15-T (2026): Federal withholding tables, Percentage Method, Worksheet 1A

    irs.gov/publications/p15t

  • SSA Contribution and Benefit Base: Social Security wage cap ($184,500 for 2026)

    ssa.gov/oact/cola/cbb.html

  • IRS Topic 751: Social Security and Medicare withholding rates

  • Tax Foundation: State individual income tax rates and brackets (annual survey)

FAQ

How does PayStubHQ calculate federal taxes?+
PayStubHQ uses the IRS Publication 15-T (2026) Percentage Method, specifically Worksheet 1A for Automated Payroll Systems. Gross pay is annualized, the withholding standard deduction is subtracted based on filing status, and the result is applied to the appropriate tax bracket table. The annual withholding is then divided by pay periods to get per-paycheck federal tax. This is the same method used by major payroll providers like ADP, Gusto, and QuickBooks.
Why do PayStubHQ's federal tax numbers differ from my 1040 estimate?+
PayStubHQ calculates payroll withholding, not tax liability. The withholding standard deduction ($8,600 for Single) is intentionally lower than the tax return standard deduction ($16,100 for Single) to ensure slight over-withholding. This means the amount withheld from each paycheck may be slightly more than your actual tax liability per period. This is by IRS design so most filers receive a small refund rather than owing at tax time.
How are Social Security and Medicare calculated?+
Social Security is 6.2% of gross wages up to the annual cap of $184,500 (2026). Once year-to-date wages exceed this cap, Social Security withholding stops. Medicare is 1.45% on all wages with no cap. An Additional Medicare Tax of 0.9% applies to wages exceeding $200,000 annually, bringing the combined Medicare rate to 2.35% above that threshold.
Does PayStubHQ support all 50 states?+
Yes. PayStubHQ calculates state income tax for all 50 US states. Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For all other states, we apply the applicable effective income tax rate. Five states (CA, NJ, NY, HI, RI) also have State Disability Insurance deductions that are automatically included.
How often are the tax tables updated?+
PayStubHQ updates tax tables annually when the IRS publishes new Publication 15-T withholding brackets and the SSA publishes the new Social Security wage cap. State rates are updated when states enact changes. The current tables reflect 2026 rates from IRS Publication 15-T and the SSA contribution base of $184,500.

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