401(k) Paycheck Impact Calculator

See exactly what a change to your 401(k) contribution does to your take-home pay, using the real federal tax brackets instead of a rate you have to guess.

A dollar into the plan costs you less than a dollar

Put an extra $100 into a traditional 401(k) while your marginal rate is 22% and your take-home falls by about $78. The missing $22 is federal income tax you no longer owe this year. That is the whole of the trick. It is worth having, and it is smaller than the version most people carry around in their heads, because only one of the taxes on your payslip actually moves.

Here's the qualification, and it's the reason this page exists. Social Security at 6.2% and Medicare at 1.45% are charged on your gross wages, and a pre-tax deferral doesn't reduce either of them by a cent. Defer $100 and you still pay FICA on that $100. The federal income tax is the only line that responds, which is why the discount on a contribution is your marginal rate and nothing beyond it.

Run the numbers above and the FICA line comes out identical in both columns, 6.2% plus 1.45% of the same gross wage either way.

That isn't a rounding artefact. It's what the Social Security and Medicare rules require, and a calculator that leaves the line out is hiding the least convenient part of the answer.

There's a consolation buried in that. Your Social Security benefit is worked out from those same undiminished wages, so deferring right up to the $24,500 ceiling doesn't shave a dollar off the benefit you'll eventually claim.

How do you calculate a 401(k) contribution on your paycheck?

A 401(k) deferral comes out of gross pay, never out of net: payroll takes your percentage off the gross for that period, works federal income tax out on what's left, and charges Social Security and Medicare on the full gross regardless.

1. Divide your salary by the number of times a year you're paid. $85,000 across 26 fortnightly cheques is $3,269.23 of gross pay a period.
2. Apply your election to that gross figure. 4% of $3,269.23 is $130.77 and 10% is $326.92, and payroll never works from the amount that reaches your bank.
3. Charge FICA on the whole $3,269.23 either way. Social Security at 6.2% and Medicare at 1.45% don't move when your deferral moves, so that line is identical in both columns.
4. Take the year's deferral off your annual taxable income, not the period's. At 10% that's $8,500 off $85,000, and federal tax is charged on what remains after the standard deduction.
5. Divide the change in federal tax back across your pay periods. What's left is the discount, and it's the only line on the payslip a traditional deferral moves.

Take the page's two default rates. Going from 4% to 10% of an $85,000 salary defers $5,100 more across the year, which is $196.15 a period. Both taxable incomes land inside the 22% band, so the whole $5,100 is discounted at 22% and the federal bill falls by $1,122, or $43.15 a period. Take-home therefore drops by $196.15 less $43.15, which is $153.00 a fortnight. That's the figure in the box above, and it works out at 78 cents of pay for every dollar into the plan.

The error worth avoiding is doing step four on one paycheck instead of on the year. A 401(k) deferral isn't taxed at the rate on this fortnight's cheque; it comes off the top of your annual taxable income, so the discount is your marginal rate. If the change straddles a bracket edge, part of it is discounted at one rate and the rest at the next one down, which is why a flat rate typed into a box goes wrong for anyone sitting near a boundary.

A Roth deferral costs you the whole amount

A designated Roth contribution doesn't reduce your taxable wages, so your take-home falls by every cent you defer and there's no discount to work out at all.

Run the same change through it. Moving from 4% to 10% still puts $196.15 a period into the plan, but the federal income tax line doesn't move, so the paycheck is $196.15 lighter instead of $153.00. What you've bought with that $43.15 is a withdrawal the IRS won't tax later.

Same money into the account, $43.15 more out of the paycheck.

Your W-2 records which one you chose. A pre-tax deferral is left out of Box 1 wages and still counted in Boxes 3 and 5; a Roth deferral sits in all three. So the FICA half is the same either way and only the income tax line tells them apart. The calculator above prices the pre-tax case, and the Roth comparison run across a working life is the only frame in which the choice has an answer.

Typing in your own tax rate is the wrong way to do this

Nearly every free calculator competing for this search asks you to type in your tax rate, as though 22% were a figure you keep in your head. That assumes you know it, and that it's a single number. It's neither.

Federal tax is charged in bands and a deferral comes off the top band first, so the figure that matters is the rate on your last dollar, not the average across everything you earned. This tool runs the real 2026 brackets from Rev. Proc. 2025-32 against your salary and filing status, takes off the standard deduction, and reports the marginal rate it found rather than asking you to supply one. Enter a salary near a bracket edge and you'll see the effect: the same contribution buys a different discount either side of the line.

The second difference is FICA. One of the sites currently ranking for this search carries a heading promising a payroll tax breakdown, then admits in the body that FICA isn't included. Ours computes the 6.2% and the 1.45% and then shows you why the total doesn't budge when your contribution does.

The ceiling moves at 50, again at 60, and back down at 64

If the goal is to finish the year exactly on that ceiling, the per-paycheck calculator works backwards from what payroll has already sent.

Your contribution is capped for you. For 2026 the §402(g) employee limit is $24,500. From the year you turn 50 you can add a catch-up contribution, which takes the total to $32,500, and between ages 60 and 63 a larger catch-up applies instead and lifts it to $35,750. At 64 it drops back down, which catches people out, because a ceiling written into the tax code is assumed to only ever climb.

A second ceiling catches high earners. Only the first $360,000 of pay counts for plan purposes under §401(a)(17), so a percentage-of-salary contribution stops growing above that figure even while the dollar limit is still some way off.

State tax is missing, and so is everything else payroll takes

Federal income tax plus Social Security and Medicare. Nothing else. No state or local income tax, no health insurance premium, no HSA, FSA, disability cover or union dues. The standard deduction is assumed instead of itemised deductions, so your real paycheck comes in under the figure above by whatever else your employer withholds before it pays you.

Roth contributions belong on the Roth versus traditional calculator, where the arithmetic runs the other way: a Roth deferral cuts your take-home by its full amount, because the tax is settled now instead of later. Which of the two is cheaper over a working life turns on your tax rate decades from now, and nobody knows that, me included.

Frequently asked questions

How much does contributing to a 401(k) actually reduce my paycheck?

Less than the amount you contribute. A pre-tax contribution comes out before federal income tax is worked out, so an extra dollar deferred reduces your take-home by a dollar minus your marginal rate. At a 22% marginal rate, an extra $100 into the plan costs about $78 of take-home pay. It doesn't cost any less than that, because FICA is charged on the full wage whichever way you go.

Does a 401(k) contribution reduce Social Security and Medicare tax?

No. A traditional deferral cuts federal income tax and leaves FICA alone, so Social Security at 6.2% and Medicare at 1.45% come off your gross wages whether you defer or not. That cuts both ways, and mostly in your favour: the wages your benefit is calculated from aren't reduced either, so putting more into the plan won't lower the Social Security you eventually collect.

What contribution rate should I choose?

Start with whatever rate captures your full employer match, because that's the only part of the account someone else pays for, and the match calculator will find that rate for you. Above the match line it's a budget question first and a tax question second, with the §402(g) ceiling as the only hard stop. This page prices the tax half.

Why is my take-home lower than this shows?

The model here covers federal income tax plus Social Security and Medicare, and it assumes the standard deduction. Your actual paycheck is lower by everything else your employer withholds: state and local tax, insurance premiums, HSA contributions, plan loan repayments and the rest of the list.