How we calculate

This page explains where our data comes from and how each calculator turns it into an answer. Each calculator page also lists the specific sources and assumptions it uses.

Data sources

• Federal income tax: IRS tax brackets, standard deductions and inflation adjustments for the current tax year.
• State income tax: Brackets, rates and standard deductions published by each state's tax agency.
• Payroll taxes (FICA): Social Security and Medicare rates and the Social Security wage base from the IRS and the Social Security Administration.
• Wages: Bureau of Labor Statistics Occupational Employment and Wage Statistics.
• Rent: HUD Fair Market Rents.
• Income and housing: U.S. Census Bureau American Community Survey.
• Mortgage rates: Freddie Mac Primary Mortgage Market Survey, via the Federal Reserve Bank of St. Louis (FRED).

Take-home pay

We start from gross pay, subtract pre-tax contributions such as 401(k) deferrals, then apply the standard deduction for your filing status. Federal and state income tax are calculated bracket by bracket. Social Security and Medicare are applied to wages, including the Social Security wage cap and the Additional Medicare Tax above the IRS thresholds.

State income tax uses each state's brackets, standard deduction and personal exemption. We also model the state rules that change results at ordinary incomes, including deduction and exemption phase-outs (Alabama, Connecticut, Maryland, Minnesota, Ohio, Rhode Island, Wisconsin), Alabama's deduction for federal income tax, Arkansas's low-income tax table, Utah's taxpayer credit, Vermont's minimum tax at higher incomes, and Pennsylvania's taxation of 401(k) contributions. We include California State Disability Insurance, Massachusetts Paid Family and Medical Leave, and Washington's WA Cares premium. Any state rule we don't yet model is listed beside that state's result.

Assumptions: single or married-filing-jointly status, with all wages earned by one person; the standard deduction (no itemizing); no tax credits; residence in one state for the whole year; and no city or county income tax.

Hourly to salary

Yearly pay equals hourly rate × hours per week × paid weeks per year. The default is 40 hours and 52 weeks (2,080 hours a year), and you can change both. Overtime hours are paid at 1.5× the hourly rate, the federal minimum under the Fair Labor Standards Act for non-exempt hours over 40 a week. We don't model state daily-overtime rules.

Monthly pay is the yearly total ÷ 12, twice-monthly pay ÷ 24 and biweekly pay ÷ 26. The per-day figure assumes a 5-day week. After-tax amounts run the yearly total through the take-home pay engine above and apply the share you keep evenly to each period. The after-tax hourly figure is yearly take-home pay ÷ paid hours a year.

Rent affordability

We compare rent to gross monthly income using the common 30% guideline, and also show a range based on your take-home pay and other monthly debts, since the 30% rule doesn't fit every budget.

Home affordability

We estimate a home price from income, down payment, interest rate and loan term. The monthly payment includes principal, interest, estimated property tax and homeowners insurance, and mortgage insurance when the down payment is under 20%. We check results against common lender debt-to-income limits: 28% for housing costs and 36% for total debt.

Keeping data current

Tax data is updated when the IRS and states publish new tax-year figures. Mortgage rates are refreshed regularly, and other datasets are updated when their agencies release new data. Each calculator page shows when its data was last updated.

Limitations

Our results are estimates. Real withholding, taxes owed and loan approvals depend on details we don't collect, such as credits, other income, local taxes and lender requirements. Use our numbers as a starting point, not a final answer.

Corrections

Spotted something wrong? Contact us with the page and the figure in question. We review every report.