Your gross salary is what employers advertise, but your take-home pay—the money that actually hits your bank account—is significantly different. Several taxes and deductions reduce your paycheck: federal income tax (calculated using progressive tax brackets), state income tax (which varies dramatically by location), Social Security tax (6.2% up to the annual wage base), and Medicare tax (1.45% on all wages, plus an additional 0.9% above certain income thresholds). Federal income tax uses a progressive bracket system, meaning you don't pay the same tax rate on your entire income. For example, as a single filer in 2026, you might pay 10% on the first $12,400, then 12% on income between $12,400 and $50,400, and higher rates on income above that. State taxes work similarly but with different brackets and rates depending on where you live. Some states like Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming have no income tax at all, while others like California and Washington D.C. have significant state income taxes. Your filing status also matters significantly. Married couples filing jointly have higher income thresholds before entering higher tax brackets, while single filers and heads of household have different thresholds. Understanding these components helps you make better financial decisions about career moves, relocations, and retirement planning.