The amount of money taken out of a paycheck for income taxes depends on how much you earn, how often you are paid and how many deductions you claim. The amount of money taken out for Social Security and Medicare taxes is a direct percentage of your wage or salary, although there is an upper limit on the amount you are required to pay in Social Security taxes.
When you start work for a new employer, you fill out a W-4 form instructing him as to how to deduct federal income tax from your paychecks. Your completed W-4 contains your filing status, such as married or single, and the number of deductions corresponding to your particular type of tax obligation. The more deductions you claim, the less money your employer takes out of your paycheck. You are entitled to claim deductions for each legal dependent you have, but if you work more than one job, you should claim fewer deductions because your overall tax obligation will probably be higher.
Your employer bases your income tax withholding on information in federal tax tables that the IRS mails to her at the beginning of each calendar year. These tables contain pages for different filing statuses, such as married or single, as well as pages for weekly, biweekly and monthly pay periods. They contain columns corresponding to the number of deductions that you claim, and lines corresponding to a salary or wage range, such as $200 to $210 per week.
Your employer also takes money out of your paycheck for Social Security and Medicare taxes, or FICA taxes. The Social Security deduction is .062 times your gross wages, and the Medicare deduction is .0145 times your gross wages. There is a maximum of $106,800 on wages or salaries that are subject to Social Security tax, but there is no limit on wages or salaries subject to Medicare withholding.
Depending on the state where you live, your employer may be required to take additional taxes out of your paycheck. These may include an employee contribution to your industrial insurance or the fund that takes care of you if you are hurt at work. Employee contributions for industrial insurance vary based on the state where you live and the industry in which you work. In addition, most states have state income taxes that employers must withhold from paychecks. Rates vary from state to state, and some states, such as Washington, have no income tax at all.
- Comstock/Comstock/Getty Images