Almost everyone meets this once: the offer letter says a number, the first deposit says a smaller one, and nobody explained the gap. It is not an error and it is not a mistake in payroll. It is four separate deductions doing four different jobs, and once you can name them the number stops feeling arbitrary.
The four things taken out before you see it
- Federal income tax. Withheld according to the elections on your W-4 and the IRS withholding tables — not according to what you will eventually owe. That distinction matters: withholding too little produces a bill in April, withholding too much is an interest-free loan to the government.
- FICA. Social Security at 6.2% of wages up to the annual wage base ($184,500 in 2026) plus Medicare at 1.45%, with an extra 0.9% above $200,000. This is a fixed percentage, not a choice.
- State income tax. Depending on where you work and live — and eight states charge none on wages at all.
- Benefits. Health premiums, retirement contributions, HSA deposits. These come out before income tax, which is the one deduction that works in your favour.
A worked example at $75,000
Single filer, standard deduction of $16,100, so taxable income is $58,900. Federal tax on that is about $7,670. FICA is $4,650 of Social Security plus $1,087.50 of Medicare, or $5,737. That leaves $61,593 before any state tax.
Now the state line, which is where the same salary stops being the same salary. In a state with no wage tax that is your number. In Oregon, at an estimated 8.75%, the state takes $6,563 and the figure falls to $55,030. Same employer, same work, same $75,000 — a difference of $6,563 a year, or a used car every five years.
See your own numbers side by side on the take-home pay by state comparison, or estimate one state on the paycheck calculator.
Why the first check is often the strangest one
Pay periods rarely start on your first day, so the first deposit usually covers a partial period. Beyond that, pay frequency changes the size of every check without changing annual pay: biweekly pays 26 times a year and semimonthly pays 24. Comparing a biweekly check with a semimonthly one as if they were the same is one of the most common budgeting mistakes there is.
The two levers you actually control
Withholding accuracy. The goal is to owe close to zero in April and get close to zero back. A large refund feels like a win and is actually the government holding your money interest-free for a year. The IRS estimator exists for exactly this, and updating a W-4 is a five-minute job with your payroll department.
Pre-tax contributions. Every dollar into a 401(k) or HSA comes out before income tax, so it reduces the taxable wage the other deductions are computed on. A dollar contributed pre-tax costs you less than a dollar of take-home pay — which is why the order of operations matters more than the amount at first.
Frequently asked questions
Why is my paycheck different every month?
Pay frequency and the calendar are the usual reasons. A biweekly schedule produces 26 checks a year, so two months have three paydays; semimonthly is always 24. Overtime, bonuses, and a mid-year deduction change also shift a single period.
Should I want a big tax refund?
No. A refund means you over-withheld all year — the government held your money without paying interest. Adjusting your W-4 so withholding matches your actual liability puts that money in your account each month instead.
Does a raise push me into a higher bracket and leave me with less?
No. Federal brackets are progressive: only the income above each threshold is taxed at the higher rate, so a raise always increases take-home pay. What can change is the size of the increase.
