Enter your hourly wage, hours worked per week, and state tax rate into the calculator to determine your net pay.

Paycheck Calculation Formula

The following formula is used to calculate the net pay from your hourly wage. 

Net Pay = Hourly Wage * Hours Worked Per Week * (1 - State Tax Rate / 100)

Variables:

  • Net Pay is the net amount you take home ($)
  • Hourly Wage is your pay per hour before deductions ($)
  • Hours Worked Per Week is the total number of hours worked each week
  • State Tax Rate is the percentage of tax deducted from your wage (%)

To calculate the net pay, multiply your hourly wage by the hours worked per week, then multiply the result by (1 – state tax rate / 100).

What is Paycheck Calculation?

Paycheck calculation refers to the process of determining the net amount you take home after deductions such as state taxes. This involves understanding your gross pay, the frequency of your paycheck, and the applicable tax rates. Proper paycheck calculation ensures accurate budgeting and financial planning.

How to Calculate Net Pay?

The following steps outline how to calculate the net pay using the given formula.

  1. First, determine your hourly wage and the number of hours you work per week.
  2. Next, determine the applicable state tax rate.
  3. Use the formula from above: Net Pay = Hourly Wage * Hours Worked Per Week * (1 – State Tax Rate / 100).
  4. Finally, calculate the net pay by plugging in the values.
  5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem:

Use the following variables as an example problem to test your knowledge.

Hourly Wage = $20

Hours Worked Per Week = 40

State Tax Rate = 5%

FAQ

1. What is gross pay?

Gross pay is the total amount of money earned before any deductions like taxes, insurance, or retirement contributions are taken out.

2. How is net pay different from gross pay?

Net pay is the amount of money you take home after all deductions have been subtracted from your gross pay.

3. How often should I use the paycheck calculator?

It’s helpful to use the paycheck calculator whenever there’s a change in your salary, tax rates, or if you want to budget your finances more accurately.

4. Can this calculator be used for different states?

Yes, you can adjust the state tax rate field to match the tax rate of any state to calculate the net pay accordingly.

5. Is the calculator accurate?

The calculator provides an estimate of your net pay based on the inputs provided. For exact figures, it’s best to consult your pay stub or HR department.