Insights
Optimize your paycheck withholding with a simple calculator
By Team OneStopAug 20246 min read
The fastest way to right-size your paycheck is to start with your real gross, subtract predictable deductions, and model both federal and state tax in one place.
How withholding works
Your employer pulls from your gross pay based on your W-4 and state forms. Under-withholding can lead to penalties; over-withholding is an interest-free loan to the government.
Set up your inputs
- Gross annual salary: use your offer letter or latest paystub.
- Pretax deductions: 401(k), HSA, commuter, and insurance premiums.
- State rate: choose a conservative blended rate if your state has brackets.
Gross salary: 85,000
Pretax deductions: 15,000
State rate: 5%
Federal rate (effective): 22%Optimize your withholding
Pair a calculator with your paystub. Adjust allowances until your projected effective rate matches your year-to-date trend. Re-run after bonuses, promotions, or major deductions.
| Scenario | Effective tax | Expected refund |
|---|---|---|
| Current | 26.4% | $1,200 |
| Adjusted withholding | 24.8% | $350 |
FAQ
Does this replace my payroll system? No - use it to decide your withholding before updating HR forms.