What an hourly wage takes home
What you actually earn an hour
The rate on your offer letter is before tax. The figure above it is what an hour of your time is worth after federal tax, Social Security and Medicare, and state tax where your state charges any. On overtime the gap is wider than people expect, because the extra pay stacks on top of everything you have already earned and is taxed at the rate that applies there, not at your average rate.
Overtime is not taxed at a special rate. It is ordinary income; it just arrives after the lower brackets are used up.
Where the federal tax came from
One row for each bracket your yearly income reaches. The rate on the last row applies only to the part of your income inside that band, not to all of it.
| Rate | On income between | Taxed | Tax |
|---|
What this leaves out
It assumes the same hours every pay period, which hourly work often is not. Unpaid leave, a short week, or a month with an extra shift all change the yearly figure and therefore the bracket you land in. Shift differentials, tips and bonuses are not included. Neither are pre-tax deductions; the salary calculators handle those.
These are the 2026 federal brackets and a Social Security wage base of $184,500. It is arithmetic on the numbers you enter, not tax advice.