How Much Do Taxes Take Out of Your Paycheck in MA?

Managing personal finances requires understanding paycheck deductions. While gross salary is total earnings, net pay is the amount received after mandatory and voluntary deductions. This article clarifies the components that typically reduce an individual’s paycheck in Massachusetts.

Components of Payroll Deductions

Mandatory taxes are withheld from an employee’s gross wages. These deductions fund various federal and state programs, contributing to social insurance and public services.

Federal income tax is a progressive system, meaning the percentage of income taxed increases with earnings. The amount withheld depends on total income, filing status, and any adjustments claimed. Employers withhold this tax based on information provided by the employee.

FICA taxes are a mandatory federal deduction, funding Social Security and Medicare programs. For 2025, employees contribute 6.2% of their wages to Social Security, up to an annual wage base limit of $176,100. There is no wage base limit for Medicare, with employees contributing 1.45% of all their wages. An additional Medicare tax of 0.9% applies to wages exceeding $200,000 for single filers, $250,000 for those married filing jointly, and $125,000 for those married filing separately.

Massachusetts levies a state income tax on earnings. For 2025, the state has a flat income tax rate of 5% on most income. An additional 4% surtax applies to annual income exceeding $1 million, resulting in a 9% tax rate on that portion. Employers withhold this state tax from an employee’s gross pay.

Massachusetts has a Paid Family and Medical Leave (PFML) program, requiring employee contributions. For 2025, the total contribution rate for employers with 25 or more covered individuals is 0.88% of eligible wages. This includes 0.70% for medical leave and 0.18% for family leave. Employees can be responsible for up to 0.28% for medical leave and 0.18% for family leave, totaling 0.46% of their wages.

Employers with fewer than 25 covered individuals have a total PFML contribution rate of 0.46% for 2025, borne entirely by the employee. These contributions are capped by the Social Security wage base limit, ceasing once an individual’s earnings reach that annual threshold. This state-mandated program provides benefits for qualified leaves, such as caring for a serious health condition or bonding with a new child.

How Withholding is Determined

The amount of tax withheld from a paycheck is influenced by several factors. These variables help ensure the tax collected throughout the year closely matches an individual’s actual tax liability, aiming to avoid significant underpayment or overpayment at tax filing time.

An employee’s gross income level directly affects the amount of federal and state income tax withheld. As earnings increase, so does the potential tax liability, especially for federal income tax due to its progressive rate structure. Even with a flat state tax rate, higher income means a larger amount subject to that rate. Employers use tables and calculations based on earnings to determine appropriate withholding for each pay period.

The Federal Form W-4 is a document employees complete to inform their employer how much federal income tax to withhold. Entries on this form, such as filing status (e.g., Single, Married Filing Jointly), dependents claimed, and adjustments for other income or deductions, directly influence the withholding calculation. Claiming more dependents or indicating significant deductions can reduce the amount withheld. Conversely, requesting additional withholding can increase it.

The Massachusetts Form M-4 serves a comparable purpose for state income tax withholding. On this form, employees indicate their personal exemptions and any additional amounts they wish to have withheld. Employers use these selections to calculate the appropriate Massachusetts state income tax to deduct from each pay period. Like the W-4, the M-4 allows for customization to align withholding with an individual’s expected state tax obligations.

Pre-tax deductions play a role in determining withholding amounts. Contributions to employer-sponsored plans, such as 401(k) retirement accounts, health insurance premiums, or flexible spending accounts (FSAs), are deducted from gross pay before taxes are calculated. This reduces an individual’s taxable income, which can lower the amount of federal and state income tax withheld. Such deductions can reduce current tax liability while saving for future needs or covering healthcare costs.

The frequency of pay (weekly, bi-weekly, or monthly) can affect the amount withheld per paycheck. While annual tax liability remains consistent, the withholding amount is spread across the number of pay periods. Employers adjust per-pay-period withholding to account for this frequency, aiming for the correct total annual amount to be remitted to tax authorities. This ensures taxes are collected consistently throughout the year.

Understanding Your Pay Stub

A pay stub is a record provided by an employer that outlines an employee’s earnings and deductions for a specific pay period. Regularly reviewing this document helps verify the accuracy of wages and withheld amounts. It provides a clear breakdown of how gross earnings are transformed into net pay.

Every pay stub displays the gross pay, which is the total amount earned before any deductions. This figure represents full compensation for work performed during the pay period. It serves as the starting point from which all taxes and other contributions are subtracted.

The deductions section of a pay stub itemizes all amounts withheld from gross pay. This area lists federal income tax, FICA taxes (Social Security and Medicare), Massachusetts state income tax, and Massachusetts PFML contributions. Any pre-tax deductions, such as health insurance premiums or 401(k) contributions, are also shown here. Each deduction is presented with both the current pay period’s amount and a year-to-date (YTD) total.

The net pay, or take-home pay, is displayed, representing the amount directly deposited into an account or provided as a physical check. This is the remaining portion of gross earnings after all deductions have been applied. Pay stubs include year-to-date (YTD) figures for gross earnings and each deduction type. These YTD totals are useful for tracking cumulative income and contributions throughout the year.

Regularly reviewing your pay stub helps ensure correct amounts are withheld and all deductions are properly accounted for. If discrepancies are noted, such as incorrect tax withholdings or missing deductions, contact the employer’s human resources or payroll department promptly for clarification and correction. This proactive approach helps maintain accurate financial records and prevents potential issues with tax filings.