401(k) Paycheck Impact Calculator

How a pre-tax 401(k) changes your paycheck

A traditional 401(k) contribution comes out of your gross pay before federal and state income tax are figured. That lowers your taxable wages, so you owe less income tax. The upshot is that your take-home pay drops by less than the amount you contribute, because the tax you no longer pay covers part of the contribution.

Here is a worked example. Say you earn $2,500 biweekly, file as Single, and contribute 6%, which is $150 per paycheck. That $150 lowers your federal and state income-tax wages. If your combined marginal rate is about 22%, you save roughly $33 in income tax, so your take-home falls by about $117 instead of the full $150. That difference stays in your pocket while the $150 lands in your retirement account. It is why the number to watch is the net cost per dollar saved: contribute $1.00, and you only lose about $0.78 of take-home.

Why your 401(k) doesn't lower Social Security or Medicare tax

A common myth is that any pre-tax deduction shrinks every tax line. It does not. Pre-tax 401(k) deferrals come out of your income-tax wages, but they stay in your Social Security and Medicare wages. The IRS is clear on this: elective deferrals are still subject to FICA. So your FICA (6.2% Social Security up to the $184,500 wage base, plus 1.45% Medicare with no cap) is figured on your full gross pay either way.

In this calculator the FICA figure is identical before and after your contribution, and the breakdown flags it as "no change". Only the federal and state income-tax lines move. Skip that detail and you will overstate what a contribution really saves you.

2026 401(k) contribution limits and catch-up rules

For 2026 the employee deferral limit is $24,500. Workers age 50 and over can add an $8,000 catch-up, and a super catch-up of $11,250 applies at ages 60 to 63, for up to $35,750 total. The calculator projects your annual contribution from your per-paycheck amount and warns you if you are on pace to pass the base limit, since payroll will stop your pre-tax deferrals once you hit the cap.

One new wrinkle for higher earners: starting in 2026, workers age 50 and over who earned more than $150,000 in FICA wages the prior year have to make their catch-up contributions as Roth (after-tax). Those Roth catch-up dollars do not lower current taxable income, so they would not produce the paycheck savings this tool shows for pre-tax contributions.

Traditional vs. Roth 401(k): which the calculator models

This tool models a traditional, pre-tax 401(k). With a Roth 401(k) the contribution is made after tax, so it does not reduce your current income tax and your take-home drops by the full contribution amount. The trade-off comes later: qualified Roth withdrawals in retirement are tax-free, while traditional withdrawals are taxed as income. Pick traditional if you want the paycheck savings now, and Roth if you would rather pay tax now for tax-free income later.

This page covers one paycheck and one contribution type. When you want a full paycheck with every deduction, or a whole team's payroll with year-to-date wage-base tracking across all 50 states plus DC, the Payroll Calculator app does the exact math so you are not guessing.