How Much Tax Is Deducted From a Paycheck in MA?

Paychecks show a difference between gross earnings and net received due to various mandatory deductions, primarily taxes. Employers withhold these amounts to fund government programs and services at both federal and state levels. Understanding these deductions is important for managing personal finances. This article details the common types of taxes and other mandatory deductions typically seen on a Massachusetts paycheck.

Federal Income Tax Withholding

Federal income tax is a primary deduction from paychecks, to cover annual tax obligations to the U.S. government. Employers withhold these taxes throughout the year based on information provided by the employee. The accuracy of this withholding largely depends on the Internal Revenue Service (IRS) Form W-4, known as the Employee’s Withholding Certificate.

The Form W-4 dictates how much federal income tax is deducted. Key factors influencing this amount include the employee’s chosen filing status, such as single or married filing jointly, and the number of dependents claimed. Any additional withholding amounts specified by the employee, or adjustments for other income or deductions, also directly impact the calculation.

Federal income tax operates under a progressive system, meaning that higher income levels are subject to higher tax rates. Employers use IRS-provided tax withholding tables, in conjunction with the W-4 data, to determine the correct amount to deduct from each paycheck.

It is important for employees to review and update their Form W-4 whenever significant life events occur. Changes such as marriage, the birth of a child, or starting a new job can alter an individual’s tax situation. Updating the W-4 ensures that the amount of tax withheld remains accurate, helping to prevent underpayment or overpayment of taxes throughout the year.

Massachusetts State Income Tax Withholding

In Massachusetts, state income tax is also withheld from employee paychecks to fund state-level services and programs. Massachusetts generally applies a flat state income tax rate for most earners. This rate is 5% of taxable income. However, a surtax of an additional 4% applies to annual income exceeding $1 million, resulting in a 9% rate for that portion of income.

The amount of Massachusetts state income tax withheld is primarily determined by an employee’s gross wages and the number of exemptions claimed on the Massachusetts Form M-4. This form functions similarly to the federal W-4 but is specific to state tax purposes. Claiming exemptions on Form M-4 effectively reduces the portion of an employee’s income subject to state tax withholding, thereby lowering the amount deducted from each paycheck.

Employers in Massachusetts utilize state-specific withholding tables or formulas to accurately calculate the state income tax deduction. These tools consider the employee’s reported wages and claimed exemptions to ensure compliance with state tax laws. Employees should update their Form M-4 if their personal circumstances change, similar to the federal W-4, to maintain accurate withholding.

Social Security and Medicare Taxes

Social Security and Medicare taxes (FICA taxes) represent mandatory federal payroll deductions. These taxes serve distinct purposes in providing social welfare benefits. Social Security funds provide retirement, disability, and survivor benefits to eligible individuals and their families. Medicare provides health insurance coverage for individuals aged 65 or older, and for certain younger individuals with disabilities.

Both employees and employers contribute equally to FICA taxes. The employee’s portion is directly deducted from their paycheck. For Social Security, the employee contribution rate is 6.2% of gross wages. This Social Security tax applies only up to a certain annual income limit, known as the wage base limit, which is $176,100 for 2025. Once an employee’s earnings reach this limit within a calendar year, no further Social Security tax is withheld from their paychecks for the remainder of that year.

For Medicare, the employee contribution rate is 1.45% of all gross wages. Unlike Social Security, there is no wage base limit for Medicare tax; all earned income is subject to this deduction. An extra 0.9% Medicare tax applies to wages exceeding $200,000 for single filers and $250,000 for married couples filing jointly. This additional tax is solely the employee’s responsibility and does not have an employer matching component.

Other Mandatory Massachusetts Payroll Deductions

Beyond federal and state income taxes and FICA contributions, Massachusetts mandates additional payroll deductions for its Paid Family and Medical Leave (PFML) program. This program provides eligible employees with job-protected paid leave for qualifying family and medical reasons. These reasons can include managing a serious health condition, caring for a family member with a serious health condition, or bonding with a new child.

Both employees and employers contribute to the PFML fund, with the employee’s portion withheld directly from their wages. For 2025, the total PFML contribution rate for employers with 25 or more employees is 0.88% of eligible wages. The employee’s share can be up to 0.28% for medical leave and 0.18% for family leave, totaling a maximum of 0.46%. For employers with fewer than 25 employees, the total contribution rate is 0.46% of eligible wages, all of which is borne by the employee (0.28% for medical leave and 0.18% for family leave).

The PFML contributions are applied to wages up to the Social Security taxable maximum, which is $176,100 for 2025. These deductions are distinct from income taxes and FICA taxes, representing a separate state-mandated benefit. While other deductions like health insurance premiums or retirement plan contributions may appear on a paycheck, they are typically voluntary or benefit-related and not mandatory government taxes or deductions.