Contributing to a traditional 401(k) lowers your take-home pay by less than the dollar you put in — because every pre-tax dollar you defer also skips income tax. This paycheck after 401(k) calculator shows the real per-check drop in your net pay once that tax savings is counted. Enter your pay per period, your 401(k) percentage, and your marginal tax rate to see your new take-home and the "net cost" of saving.
Say you earn $2,500 per paycheck and start contributing 8% ($200) to a traditional 401(k), and your combined federal + state marginal rate is 24%. Your take-home does not fall by $200 — it falls by about $152. The other $48 was money that would have gone to income tax anyway; instead it is now growing in your retirement account. That is the core magic of pre-tax saving: you fund $200 of future wealth for $152 of present spending power.
| Line | Calculation | Amount |
|---|---|---|
| Gross paycheck | given | $2,500.00 |
| 401(k) contribution | 8% × $2,500 | $200.00 |
| Income tax saved | $200 × 24% marginal | $48.00 |
| Net take-home reduction | $200 − $48 | $152.00 |
The higher your marginal bracket, the cheaper it is to contribute. A 32%-bracket saver funds the same $200 for just $136 of take-home; a 12%-bracket saver pays $176. This is also why pre-tax 401(k) saving is usually most attractive in your peak-earning years.
A traditional 401(k) is pre-tax for income tax only. It is not exempt from FICA. So Social Security (6.2%) and Medicare (1.45%) are still withheld on your full gross, including the part you defer. That is why your W-2 shows your 401(k) deferrals in Box 3 (Social Security wages) and Box 5 (Medicare wages) but not in Box 1 (federal taxable wages). The calculator's "net cost" reflects income-tax savings; the FICA on your contribution is unchanged whether you defer or not, so it does not affect the marginal cost of contributing.
For 2026, the employee elective deferral limit is $24,500. If you are age 50 or older, you can add an $8,000 catch-up (total $32,500). Under SECURE 2.0, savers aged 60–63 get an enhanced catch-up of $11,250. These limits cover your own deferrals; any employer match is on top and does not count against them. If your percentage would push you over the annual cap, your payroll system typically stops deferrals once you hit it.
The single most valuable number in your 401(k) plan is usually the employer match. A common formula is "100% of the first 3% plus 50% of the next 2%," which means contributing at least 5% earns you a free 4% of pay. On a $65,000 salary that match is worth about $2,600 a year — an instant, guaranteed return you forfeit if you contribute below the match threshold. Always aim to contribute at least enough to capture the full match before optimizing anything else.
If you choose a Roth 401(k) instead, you contribute after-tax dollars, so a $200 Roth deferral cuts your take-home by the full $200 — there is no upfront income-tax savings shown by this calculator. In exchange, qualified Roth withdrawals are tax-free in retirement. A rough rule: choose Roth if you expect to be in a higher tax bracket later; choose traditional (modeled here) if you expect a lower bracket in retirement or want the bigger paycheck today.
Less than the contribution itself. Each pre-tax dollar saves you your marginal income-tax rate. Contribute $200 at a 24% rate and take-home drops only about $152.
Yes. Traditional 401(k) deferrals are exempt from income-tax withholding but not from Social Security (6.2%) and Medicare (1.45%).
$24,500 employee deferral, plus an $8,000 catch-up at 50+ and an enhanced $11,250 catch-up at ages 60–63.
Yes. Roth is after-tax, so a $200 Roth contribution cuts take-home by the full $200, with tax-free qualified withdrawals later.