Salary Calculator Methodology & Tax Sources

SalaryHow uses transparent formulas and published tax rules to estimate salary conversions and paycheck amounts. This page explains how our calculators work, the assumptions they use, and the official sources behind our 2026 tax calculations.

1. Salary Conversion Calculators

The Hourly to Salary and Salary to Hourly calculators, and hourly-rate pages and annual-salary pages, use the same underlying schedule and formulas.

Default schedule: 40 hours per week, 52 weeks per year, 5 working days per week — 2,080 working hours per year.
Weekly = hourly rate × hours per week.
Annual = weekly pay × weeks per year.
Monthly = annual pay ÷ 12.
Biweekly = weekly pay × 2.
Semi-monthly = annual pay ÷ 24.
Daily = weekly pay ÷ days per week.

These calculators let you adjust hours per week, weeks per year, and days per week in Advanced Options — changing any of these changes every derived conversion, since each figure above is computed directly from the schedule you set, not from a fixed table.

2. Paycheck Calculator Methodology

The Paycheck Calculator estimates employee paycheck withholding for tax year 2026 — a different, more detailed calculation than the salary conversion tools above. It is built on a dedicated tax engine that follows official government withholding rules step by step:

Gross pay: annual salary ÷ pay periods per year (for salaried pay), or hourly rate × hours worked (for hourly pay).
Pay frequency: weekly (52/year), biweekly (26/year), semi-monthly (24/year), or monthly (12/year) — used to annualize and de-annualize every withholding calculation consistently.
Federal income tax withholding: computed from your Form W-4 inputs (filing status, multiple jobs, dependents, other income, deductions, extra withholding) using the IRS Publication 15-T (2026) percentage method, Worksheet 1A.
Social Security: 6.2% of taxable wages up to the 2026 Social Security wage base, correctly stopping once your year-to-date wages reach the annual cap.
Medicare: 1.45% of taxable wages, with no wage cap, plus an Additional Medicare Tax of 0.9% on wages over $200,000 in a calendar year (an employer-withholding rule, applied the same way regardless of filing status).
State income tax withholding: calculated using each state's own official 2026 method — graduated brackets, a flat rate, or an elective percentage, depending on the state.
State-specific employee payroll taxes: where a state has an employee-paid payroll tax beyond income tax (for example, disability or paid-leave insurance), it's calculated separately and shown as its own line item — never merged into the state income tax figure.
Local taxes: only applied when you select a supported local jurisdiction, or provide an explicit local rate where the state requires one — see Local Tax Limitations below.
Traditional 401(k): excluded from federal and state taxable wages, but still subject to Social Security and Medicare.
Roth 401(k): after-tax for all payroll taxes — no withholding effect.
Other deductions: pre-tax and post-tax deductions you add are applied to the wage bases they affect before the relevant taxes are calculated.
Year-to-date (YTD) wages: used to apply the Social Security wage base and Additional Medicare Tax threshold correctly, and for the handful of states whose supplemental payroll tax has its own annual wage-base cap.
Rounding: every calculation uses plain decimal dollars, rounded to the cent once, at the final result — not at each intermediate step — matching how the underlying IRS and state worksheets are themselves written.
Gross-to-net: take-home pay = gross pay − total taxes − total deductions − garnishments, never less than $0.

Paycheck withholding estimate vs. final annual tax liability: the Paycheck Calculator estimates payroll withholding and take-home pay for a single paycheck — it is not an income tax return calculator, and it does not estimate your final annual tax liability or refund. Actual withholding and year-end tax owed can differ based on your full-year income, other deductions and credits, and how your employer administers payroll.

Known limitations: HSA and FSA contributions are not yet modeled (their correct tax treatment depends on plan details this calculator can't assume). Pre-2020 Form W-4 allowances are not supported. Local income tax coverage is intentionally partial — see the Local Tax Limitations section below.

3. Federal Tax Sources

These are the authoritative federal sources used to build the Paycheck Calculator's 2026 federal withholding logic:

4. 2026 State Tax Sources

Every state's 2026 withholding method is based on an official source published by that state's department of revenue, taxation agency, or (for states with no individual income tax) the relevant constitutional provision. SalaryHow never uses third-party payroll calculators as an authoritative tax source.

State	2026 withholding method / source	Other employee payroll taxes	Local tax support
AL	Graduated (ALDOR withholding formula) — Alabama Department of Revenue	—	Not included
AK	None — Alaska has no individual income tax — Alaska Department of Labor and Workforce Development	Employment Security Tax (employee share)	N/A
AZ	Elective withholding percentage of gross taxable wages (Form A-4) — Arizona Department of Revenue	—	N/A
AR	Graduated — Arkansas Department of Finance and Administration	—	N/A
CA	Graduated (DE 44 Method B) — California Employment Development Department	California State Disability Insurance (SDI)	N/A
CO	Flat 4.4% — Colorado Department of Revenue	Colorado Paid Family & Medical Leave Insurance (FAMLI)	Not included
CT	Graduated (withholding code A-F) — Connecticut Department of Revenue Services	Connecticut Paid Leave (CTPL)	N/A
DE	Graduated — Delaware Division of Revenue	Delaware Paid Leave (employee share)	Supported
FL	None — Florida has no individual income tax — Florida Legislature	—	N/A
GA	Flat (HB 463) — Georgia Department of Revenue	—	N/A
HI	Graduated — Hawaii Department of Taxation	Hawaii Temporary Disability Insurance (TDI)	N/A
ID	Flat 5.3% — Idaho State Tax Commission	—	N/A
IL	Flat 4.95% — Illinois Department of Revenue	—	Not included
IN	Flat state rate + mandatory county tax — Indiana Department of Revenue	—	Supported
IA	Flat (transitional) — Iowa Department of Revenue	—	N/A
KS	Graduated — Kansas Department of Revenue	—	N/A
KY	Flat — Kentucky Department of Revenue	—	Not included
LA	Flat (transitional) — Louisiana Department of Revenue	—	N/A
ME	Graduated — Maine Revenue Services	Maine Paid Family & Medical Leave (PFML)	N/A
MD	Graduated (state) + mandatory county tax — Comptroller of Maryland	—	Supported
MA	Flat 5% + 4% surtax above $1,107,750 — Massachusetts Department of Revenue	Massachusetts Paid Family & Medical Leave (PFML)	N/A
MI	Flat — Michigan Department of Treasury	—	Not included
MN	Graduated — Minnesota Department of Revenue	Minnesota Paid Leave (employee share)	N/A
MS	Flat (transitional) — Mississippi Department of Revenue	—	N/A
MO	Graduated — Missouri Department of Revenue	—	Supported
MT	Graduated (simplified) — Montana Department of Revenue	—	N/A
NE	Graduated — Nebraska Department of Revenue	—	N/A
NV	None — Nevada has no individual income tax — Nevada Department of Taxation	—	N/A
NH	None — New Hampshire's interest/dividends tax was fully repealed in 2025 — New Hampshire Department of Revenue Administration	—	N/A
NJ	Graduated (Rate Tables A-E) — New Jersey Division of Taxation	Unemployment Insurance, Workforce/Supplemental Workforce Fund, Temporary Disability Insurance, Family Leave Insurance (all employee share)	N/A
NM	Graduated — New Mexico Taxation and Revenue Department	—	N/A
NY	Graduated (NYS-50-T-NYS Method II / Method III for high income) — New York State Department of Taxation and Finance	—	Supported
NC	Flat — North Carolina Department of Revenue	—	N/A
ND	Graduated (very low rates) — North Dakota Office of State Tax Commissioner	—	N/A
OH	Graduated (compressed brackets) — Ohio Department of Taxation	—	Not included
OK	Graduated — Oklahoma Tax Commission	—	N/A
OR	Graduated — Oregon Department of Revenue	Paid Leave Oregon (PFML), Statewide Transit Tax (STT)	Not included
PA	Flat 3.07% — Pennsylvania Department of Revenue	Pennsylvania Unemployment Compensation (employee share)	Explicit rate input required
RI	Graduated — Rhode Island Division of Taxation	Rhode Island Temporary Disability Insurance (TDI)	N/A
SC	Graduated — South Carolina Department of Revenue	—	N/A
SD	None — South Dakota has no individual income tax — South Dakota Department of Revenue	—	N/A
TN	None — Tennessee's Hall Tax was fully repealed in 2021 — Tennessee Secretary of State	—	N/A
TX	None — Texas has no individual income tax — Texas Legislature	—	N/A
UT	Flat — Utah State Tax Commission	—	N/A
VT	Graduated — Vermont Department of Taxes	Vermont Child Care Contribution (CCC, employee share when withheld)	N/A
VA	Graduated — Virginia Department of Taxation	—	N/A
WA	None below $1M/yr (Washington's Millionaires' Tax has no withholding component and is not effective until 2028) — Washington Department of Revenue	WA Cares Fund (long-term care), Washington Paid Family & Medical Leave (PFML)	N/A
WV	Graduated (two-table method) — West Virginia State Tax Division	—	Not included
WI	Graduated — Wisconsin Department of Revenue	—	N/A
WY	None — Wyoming has no individual income tax — State of Wyoming	—	N/A
DC	Graduated — DC Office of Tax and Revenue	—	N/A

5. Local Tax Limitations

Many U.S. cities, counties, municipalities, and school districts impose additional local income taxes on top of state and federal withholding. SalaryHow does not support every local tax in the United States.

Not included — a real local tax exists in the state, but this calculator does not model it at all (for example, Alabama's municipal occupational tax or Ohio's RITA/CCA-administered municipal income tax). These states show a local income tax of $0, which reflects what this calculator computes, not a claim that no local tax is actually owed.
Supported — a specific local jurisdiction (like New York City, Yonkers, or Wilmington) is modeled and applied only when you select it.
Explicit rate input required — local tax varies by jurisdiction in a way this calculator can't look up automatically (for example, Pennsylvania's Act 32 local Earned Income Tax); you can enter your own local rate for a more accurate estimate.
N/A — no local wage income tax exists in that state.

Local taxes are never assumed or auto-applied — they're only included when you explicitly provide the relevant jurisdiction or rate.

6. Accuracy and Updates

SalaryHow maintains tax-year-specific configuration. The current tax year supported is 2026. Tax rules change — federal and state agencies periodically update withholding tables, wage bases, and rates — and SalaryHow updates its calculation data when new official tax-year guidance is published and incorporated.

SalaryHow is an independent calculator built on published government withholding rules. It is not a real-time government data feed, not government-certified, and not a substitute for professional tax advice.

Last updated: August 15, 2026

7. Disclaimer

SalaryHow calculations are estimates for informational purposes only. Actual pay and tax withholding may vary based on your employer's payroll system, elections, deductions, benefits, local taxes, and individual circumstances. SalaryHow does not provide tax, legal, or financial advice. See our Terms of Service for our full disclaimer.

For paycheck-specific estimates, try the Paycheck Calculator. For simple wage conversions, try Hourly to Salary or Salary to Hourly.

SalaryHow Calculation Methodology