Most people read an offer letter the way they read a price tag: one number, take it or leave it. But the number in an offer letter is not what you will be paid. It is the starting point of a calculation that runs through four layers of tax, at least one of which depends on where you sleep at night. The purpose of this guide is to walk through that calculation once, slowly, so that the next offer you receive can be read in the terms that matter — dollars deposited per month.
What the letter actually says
A standard U.S. offer letter states an annual base salary (“$100,000 per year”), a pay frequency (bi-weekly is most common, semi-monthly next), a start date, and sometimes a signing bonus, target bonus or equity grant. Everything in that list is gross. Nothing in the letter is net, and the letter is not required to tell you what net will be, because it depends on choices you have not made yet — your W-4 elections, your benefits enrolment, your 401(k) percentage — and on facts the employer may not know, such as which state and city you will live in.
The one thing you can pin down before any of those choices is the baseline take-home: what a single filer, taking the standard deduction, contributing nothing to a retirement plan, would net from that salary in that location. It is not your final number, but it is the floor everything else is measured against, and it is the number this site computes for every audit.
The four layers, in the order they are applied
Federal income tax is applied first, to taxable income — gross minus the standard deduction, which is $16,100 for a single filer in 2026. It is progressive: on $100,000 the first $12,400 of taxable income is taxed at 10%, the next slice to $50,400 at 12%, and the remainder at 22%. The bill on a $100,000 salary works out to $13,170, which is 13.2% of gross even though the marginal bracket says 22%. That gap between marginal and effective is the most common misunderstanding in salary conversations, and it has its own guide.
FICA is the flat layer everyone pays: 6.2% Social Security on wages up to $184,500 and 1.45% Medicare on all wages. It is not reduced by the standard deduction and, unusually, it is not reduced by a 401(k) contribution either. On $100,000 that is $7,650. It is the same in Texas as in New York.
State income tax is where the letter starts to mean different things in different places. Nine states levy nothing on wages. Others charge a flat rate — Pennsylvania 3.07%, Illinois 4.95%, Massachusetts 5% — and the rest run their own progressive brackets. On the same $100,000, state tax is $0 in Texas, $3,070 in Pennsylvania, $4,860 in New York and $5,327 in California. Several states also run mandatory employee payroll programs (disability insurance, paid family leave) that come out of the same paycheck: California’s SDI takes 1.2% of wages, Washington’s paid-leave and long-term-care premiums together take about 1.24%.
Local income tax is the layer most people forget exists until they see their first stub. New York City, Philadelphia, Detroit, Columbus, Baltimore, Pittsburgh, Kansas City and Yonkers all have one; Portland adds two county-level taxes above $125,000; Denver charges a flat $69 a year. On $100,000, New York City’s resident tax is $3,441 and Philadelphia’s wage tax is $3,740 — more than Pennsylvania’s own state tax.
The same letter, three cities
Run $100,000 through those four layers and the monthly deposit is $6,598 in Austin, $6,054 in Los Angeles and $5,877 in New York City. The spread is $721 a month, or $8,652 a year — before rent, which widens it further. The Austin figure has no state or city layer; the Los Angeles figure carries California’s brackets and SDI; the New York City figure carries state brackets, paid family leave and the city’s own tax. None of those three employers is being more or less generous. The letter is the same. The location is not.
The questions to ask before you sign
Ask HR for the benefits summary — specifically the employee share of the health premium, because it comes out pre-tax and pre-FICA, and for the 401(k) match, because it is the only part of compensation that grows without being taxed first. Ask whether the salary is exempt or non-exempt (whether overtime applies). If there is a bonus, ask whether it is guaranteed or target, and note that bonuses are typically withheld at a flat 22% federal rate on the day they are paid, regardless of your bracket — you settle up at tax time. If there is equity, ask for the vesting schedule and whether it is RSUs (taxed as income when they vest) or options.
Then take the base salary, pick the city, and look at the audit. If your rent will be above 30% of the monthly figure it shows, the offer is thinner than it looks, whatever the headline says.
What this site does and does not do
Every audit here applies the four layers above from the published 2026 schedules, for a single filer taking the standard deduction. It does not model married filing, dependents, itemized deductions, bonuses or equity — each would change the answer and each is a different question. What it gives you is the reproducible floor: the least you will net from that number in that place, and a slider to see how a 401(k) or a health plan moves it.
Audits cited in this guide
Open the full paycheck breakdowns
About the figures in this guide
Every dollar amount above is produced by the same deterministic tax engine that generates the audit pages, using the published 2026 federal brackets and standard deduction, the 2026 Social Security wage base, each state's published schedule and each city's local tax rules. Assumptions: single filer, standard deduction, no dependents, no itemized deductions. Rent figures are median 1-bedroom asking rents refreshed quarterly. Read the methodology, or send a correction with a primary source.