Reading the Pay Stub
The deductions, in order of typical size: federal withholding (bracket-based), FICA. Social Security 6.2% plus Medicare 1.45%, then state tax (0–13%), then benefits like insurance and 401(k).
Pre-tax deductions are the quiet superpower: every dollar into a 401(k) or HSA reduces taxable income, so a $100 deferral often costs only $70–80 of take-home.
Budgeting on the Right Number
The 50/30/20 rule applies to net income: 50% to needs (housing, food, utilities, transport, minimum debt payments), 30% to wants, 20% to savings and extra debt payoff.
A $4,000 net month becomes $2,000 needs, $1,200 wants, $800 future. The rule is a starting point, high-rent cities force 55/25/20, aggressive savers run 40/20/40.
Making It Stick
Automate the 20% first, transfer on payday, before wants have a chance. Track spending for 30 days before setting buckets; budgets fail from guessing, not math.
Irregular income? Budget on a three-month average and keep a larger cash buffer. The framework survives; only the numbers flex.
Sources
FAQ
What percentage of my paycheck goes to taxes?
Typically 20–30%. FICA 7.65% plus federal brackets plus state, leaving 70–80% net for most employees.
What is the 50/30/20 rule?
50% of net income to needs, 30% to wants, 20% to savings and debt, the most durable simple budget.
How do I take home more money?
Pre-tax deductions (401(k), HSA, insurance) lower taxable income, and tuning your W-4 with the IRS estimator stops over-withholding.
A note before you begin: this tool offers educational estimates only. It cannot replace advice from a qualified professional.