How your paycheck is taxed
Your employer withholds several taxes from each paycheck. Federal income tax uses the 2026 brackets, from 10% to 37%, applied after the standard deduction of $16,100 for single filers or $32,200 for married couples. Social Security takes 6.2% of wages up to $184,500, and Medicare takes 1.45% of all wages, plus 0.9% on high incomes. Then your state may take its share.
Traditional 401(k) contributions come out before income tax, so they lower your tax bill today. Pre-tax health insurance usually lowers Social Security and Medicare too.
Minnesota income tax
Minnesota has a graduated income tax with 4 brackets, from 5.35% to 9.85%. Minnesota has four brackets, with a top rate of 9.85%.
| Taxable income (single) | Rate |
|---|---|
| $0 to $33,310 | 5.35% |
| $33,310 to $109,430 | 6.8% |
| $109,430 to $203,150 | 7.85% |
| $203,150 and up | 9.85% |
Example paycheck
A single worker in Minnesota earning $75,000 a year, paid biweekly, contributing 5% to a 401(k):
- Federal income tax
- $6,845
- Social Security and Medicare
- $5,738
- State taxes
- $3,322
- Take-home per paycheck
- $2,128.69
Ways to increase take-home pay
- Update your W-4. If you get a big refund every year, you’re overpaying through withholding.
- Use pre-tax benefits. HSA and FSA contributions cut income tax and usually payroll tax too.
- Weigh traditional vs Roth 401(k). Traditional contributions lower today’s tax; Roth contributions are taxed now but grow tax-free.
- Claim the credits you qualify for. The Child Tax Credit is worth up to $2,200 per child in 2026.
Frequently asked questions
Why is my paycheck different from this estimate?
Employers calculate withholding using your W-4, pay-period tables and local taxes, so the exact amount can differ. Your actual tax is settled when you file your return.
What is the difference between effective and marginal tax rate?
Your marginal rate is the tax on your next dollar of income. Your effective rate is your total tax divided by your total pay, which is always lower.
Are local income taxes included?
No. Some cities and counties, such as New York City, Philadelphia and most of Maryland and Ohio, add local income taxes on top of what you see here.
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