401(k) Paycheck Impact Calculator (2026)
See exactly how pre-tax 401(k) contributions change your take-home pay. Enter your paycheck and contribution rate — see the real per-paycheck cost after tax savings.
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The $300 that only costs $219
The single most misunderstood thing about 401(k) contributions: your paycheck shrinks by less than you contribute. Pre-tax deferrals come out before federal (and usually state) income tax is calculated, so every contributed dollar also erases a slice of tax:
| No 401(k) | 10% 401(k) | |
|---|---|---|
| Gross per biweekly check | $3,000 | $3,000 |
| 401(k) contribution | $0 | $300 |
| Federal withholding | $320.38 | $254.38 |
| FICA (unchanged!) | $229.50 | $229.50 |
| State (5%) | $150.00 | $135.00 |
| Take-home | $2,300.12 | $2,081.12 |
You saved $300 for retirement and your check only fell $219. The missing $81 is tax savings: $66 federal + $15 state. Your true cost per dollar saved is about 73¢ — the government funds the other 27¢.
Why FICA doesn't budge
Look at the FICA row above: identical in both columns. Pre-tax 401(k) contributions reduce income tax but not payroll tax — Social Security and Medicare are computed on your full gross wages (IRC §3121(a)(5) specifically keeps deferrals in FICA wages). Two consequences:
- The tax savings are slightly smaller than newcomers expect.
- Your Social Security earnings record — and eventual benefit — is based on the unreduced wage. The FICA "penalty" is actually buying you a bigger future benefit.
The 2026 limits that cap the math
Employee elective deferrals for 2026 (IRS Notice 2025-67, announced in IR-2025-111):
- Under 50: $24,500
- 50+: $24,500 + $8,000 catch-up = $32,500
- Ages 60–63: $24,500 + $11,250 SECURE 2.0 "super catch-up" = $35,750
The calculator annualizes your per-paycheck contribution and caps it at $24,500 (with a note about catch-ups). Note the limit is personal and annual — it follows you across employers in the same year.
What this calculator assumes
- Federal tax uses 2026 brackets and the standard deduction ($16,100 single / $32,200 married filing jointly), annualized from your paycheck — the same engine as our take-home pay calculator.
- FICA assumes you're under the $184,500 Social Security wage base; Additional Medicare (0.9%) applies above $200k single / $250k joint on an annualized basis.
- State tax uses a flat rate you enter (default 5%) applied to pay after the 401(k) deduction — correct for most states, but not Pennsylvania, which taxes deferrals going in.
- Employer match is excluded from the paycheck math (it's extra pay, not a deduction) — but always contribute enough to get the full match; it's the highest guaranteed return available to you.
- Roth contributions are not modeled here: they reduce take-home dollar-for-dollar since there's no current-year tax break.
Estimates only — not tax or financial advice. Withholding methods vary by employer.
Data sources
- Limits: IRS Notice 2025-67 / IR-2025-111 (2026 elective deferral $24,500; catch-ups $8,000 / $11,250).
- Federal tax: IRS Revenue Procedure 2025-32 (2026 brackets, standard deduction), as made permanent by P.L. 119-21.
- FICA: SSA 2026 — $184,500 wage base; 6.2%/1.45%; Additional Medicare thresholds $200k/$250k. Pre-tax deferrals remain FICA wages per IRC §3121(a)(5).
- PA exception: Pennsylvania taxes 401(k) deferrals as current compensation (PA DOR guidance).
Frequently asked questions
If I contribute $300 per paycheck to my 401(k), does my check shrink by $300?
No — it shrinks by less. Pre-tax contributions reduce the income your federal (and usually state) tax is calculated on, so you also pay less tax. At a 22% federal marginal rate plus 5% state, a $300 contribution only reduces take-home by about $219. The $81 difference is tax you no longer owe.
Does 401(k) reduce Social Security and Medicare tax?
No — this surprises almost everyone. Pre-tax 401(k) contributions reduce federal and (usually) state income tax, but FICA taxes (6.2% Social Security + 1.45% Medicare) are calculated on your full gross pay. Your future Social Security benefit is also based on that unreduced wage figure, which is actually good for you.
What is the 401(k) contribution limit for 2026?
$24,500 in employee elective deferrals if you're under 50 (IRS Notice 2025-67). Workers 50+ can add an $8,000 catch-up ($32,500 total); ages 60–63 get an $11,250 'super catch-up' ($35,750 total). The calculator caps your annualized contributions at $24,500 and warns you.
Should I choose pre-tax or Roth 401(k) contributions?
Pre-tax saves tax now at your current marginal rate; Roth costs more per paycheck today but withdrawals in retirement are tax-free. Rough rule: if you expect to be in a lower bracket in retirement, pre-tax usually wins; if you're early-career in a low bracket now, Roth is attractive. This calculator models pre-tax only.
Does my employer's match reduce my paycheck?
No. The match is extra money your employer adds on top — it never comes out of your pay. A 50% match on 6% of pay is effectively a 3% raise you only get by contributing. Always contribute at least enough to capture the full match before worrying about anything else.
Pennsylvania taxes my 401(k) contributions?
Correct — Pennsylvania is the notable exception: it does not exclude 401(k) deferrals from state taxable wages, so you pay PA state tax on the money going in (though qualified withdrawals are then state-tax-free). Most other states follow the federal pre-tax treatment, which is what this calculator assumes.
Estimates only, not tax or financial advice. Figures reflect the 2026 tax year. Verify important decisions with the IRS or a qualified tax professional.