How to Find the Percentage Taken Out of Paycheck With Pay Stub

Understanding ‘how to find the percentage taken out of paycheck with pay stub’ is a common question among employees who want to ensure they’re receiving the correct amount of income.

The process starts by calculating the total taxes deducted, such as Social Security, Medicare, and both federal and state withholding, which can be found on your W-4 form.

Once you’ve got the right deductions, you can then determine the percentage of your paycheck that goes towards taxes by dividing the total deductions by your gross pay.

With our experience in payroll services, we at Check Stub Maker can help you create an estimated pay stub that clearly shows the percentages deducted from your paycheck each pay period.

In this guide, we’ll walk you through the process step-by-step of calculating your salary percentages, helping you decipher every detail with our trusted pay stub generator.

What this article covers:

How to Calculate Take-Home Net Pay as a Percentage of Gross Pay
Pay Stub Example with Net Pay Calculations

How to Calculate Take-Home Net Pay as a Percentage of Gross Pay

At Check Stub Maker, we’ve curated an easy guide on correctly calculating your take-home net pay.

1. Tally Your Employee’s Gross Wages

The first step in calculating the percentage taken out of your paycheck is to determine the gross wages.

You may be wondering, “What is gross pay on pay stub?” Gross pay refers to the total amount of money you’ve earned before any deductions are applied.

This includes your:

salary
hourly wages
bonuses
any other earnings

Drawing from our experience, it’s essential to have a clear understanding of your gross pay, as all subsequent calculations will depend on this initial figure.

Ensure that you keep this number handy, as you’ll use it in every step that follows after this.

2. Subtract Elective Pre-Tax Withholdings

Next, you need to subtract any elective pre-tax withholdings from the gross pay on your check stub.

These withholdings can include:

contributions to retirement plans like a 401(k)
health insurance premiums
flexible spending accounts (FSAs)

Knowing how to calculate check stubs involves deciphering these specific deductions. This is because they reduce your taxable income, ultimately lowering the amount of tax taken out of your paycheck.

As per our expertise with various payroll scenarios, precisely identifying and subtracting these pre-tax withholdings can significantly affect the overall percentage of your paycheck that’s taken out for taxes.

3. Subtract Employee-Only Taxes

This step involves subtracting the taxes that are solely your responsibility as an employee, which include:

federal income tax
state taxes
any applicable city or local taxes

Each of these taxes is typically listed on your pay stub under specific headings.

Based on our first-hand experience at Check Stub Maker, we’ve found that these taxes form the bulk of the deductions from an employee’s paycheck.

The percentages for these taxes can vary depending on your:

tax bracket
state of residence
any applicable local tax rates

4. Subtract Other Taxes Paid By Employees And Employers

In addition to the taxes you pay as an employee, there are taxes shared between you and your employer.

The most common of these on your paystubs are Social Security and Medicare taxes.

Social Security tax is typically 6.2% of your gross pay, while Medicare tax contributes approximately 1.45%. These percentages are fixed, but they represent a significant portion of your paycheck deductions.

These deductions are mandatory and apply to all employees, making them an essential part of overall tax calculation.

Understanding these shared taxes is crucial for accurately calculating the percentage taken out of your paycheck.

5. Subtract Voluntary And Involuntary Deductions

Voluntary and involuntary deductions include things like after-tax paycheck deductions such as union dues, contributions to savings plans,l and wage garnishments, which are court-ordered withholdings.

Though often regarded as smaller amounts, these deductions can add up quickly over time. Therefore, they shouldn’t be overlooked when calculating the total percentage of your paycheck that’s eventually deducted.

6. Add Reimbursements Back In

Sometimes, your employer may reimburse you for certain expenses, such as travel costs or work-related purchases. These reimbursements are then added back into your pay and aren’t subject to taxes.

Including these reimbursements in your calculations ensures that your take-home pay reflects only the deductions that apply to your earnings, giving you a more precise picture of your net pay.

7. Calculate Total Net Pay

Finally, you need to subtract the total deductions from your gross pay in order to determine your net pay. This is known as the amount you actually take home, or your ‘take-home pay’.

The percentage taken out of your paycheck is found by dividing the total deductions by the gross pay and then multiplying them by 100.

By following these steps we’ve curated here at Check Stub Maker, you can accurately determine how much of your paycheck is deducted for taxes and other expenses.

Pay Stub Example with Net Pay Calculations

To make the process of deciphering the percentage of deductions used to calculate your net pay even clearer, let’s consider an example:

Your gross pay is $5,000 per month.
You have $500 in elective pre-tax withholdings, $1,000 in federal income tax, $200 in state taxes, $100 in local taxes, $310 in Social Security tax, and $72.50 in Medicare tax.
You also have $100 in voluntary deductions.

Here’s how to figure out the percentage taken from your gross pay in order to calculate your net pay:

$500 + $1,000 + $200 + $100 + $310 + $72.50 + $100 = $2,717.50 (total amount of deductions)

$5,000 (gross pay) – $2,717.50 = $2,282.50 (total net pay)

$2,282.50 ÷ 5,000 = 0.4565

0.4565 x 100 = 45.65% (percentage of deductions taken out of gross pay)

After trying out this product, we found that these calculations are automatically done with our user-friendly paystub maker.

Simply input all of your earnings and benefits into the designated sections on our easily customizable template.

From there, we at Check Stub Maker will give you a precise and detailed breakdown of your payroll in a matter of minutes.

Conclusion

In this guide, we discovered that determining ‘how to find the percentage taken out of paycheck with pay stub’ involves a detailed understanding of your gross pay, the various deductions applied, and the taxes withheld.

So, what are you waiting for? Use our pay stub creator now for accurate and easy payroll management.

Whether you’re a small business owner or an employee, our tools at Check Stub Maker are designed to help you get a 100%, clearer picture of your finances without any hassle.

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Author: CheckStubMaker.com