Our Calculation Methodology

1. Federal Income Tax

Federal income tax is calculated using the official IRS progressive tax brackets for the selected tax year. We apply the standard deduction before computing tax.

• Standard deduction applied (Single filer unless specified)
• Progressive tax brackets applied incrementally by layer
• No itemized deductions assumed
• No federal credits included (EITC, child tax credit, etc.)

Tax brackets and standard deduction values are updated annually based on IRS revenue procedures published in the fall of each year.

2. State Income Tax

State income tax varies by state and is calculated using one of three models:

• Progressive tax states — e.g., California, New York, New Jersey
• Flat-rate states — e.g., Pennsylvania (3.07%), Illinois (4.95%)
• No income tax states — e.g., Texas, Florida, Washington

State standard deductions or personal exemptions are applied where available. Local income taxes (such as NYC local tax) are excluded unless specifically noted. State brackets are sourced from official state department of revenue publications and verified annually.

3. Payroll Taxes (FICA)

Payroll taxes include:

• Social Security: 6.2% on wages up to the annual wage base limit ($180,700 in 2026)
• Medicare: 1.45% on all wages (no cap)

The additional 0.9% Medicare surtax on income over $200,000 (single) is not included in base calculations. Wage base limits are sourced from the Social Security Administration and updated each January.

4. Rent & Cost-of-Living Data

Rent estimates use HUD Fair Market Rents, which represent the 40th percentile gross rent for standard-quality units in each metropolitan area, updated annually each October. We provide four housing tiers:

• Studio — estimated at 78% of 1BR FMR (consistent with HUD ratio data)
• 1-Bedroom — direct HUD FMR 1BR value
• 2-Bedroom — direct HUD FMR 2BR value
• Family (3–4 BR) — estimated at 133% of 2BR FMR

Cost-of-living adjustments use the C2ER/ACCRA Cost of Living Index (national average = 1.00), expanded with per-category monthly cost estimates: food, transportation, utilities, and healthcare — all scaled by the city index.

5. Food Cost Data

Monthly food cost estimates are derived from two primary sources:

• USDA Food Cost Plans (2024) — the Low-Cost Food Plan provides household-size-adjusted monthly food budgets at the county level
• MIT Living Wage Calculator (2024) — provides food cost components of the living wage by county and family composition

National baseline figures (2026 estimate, per month):

• Single adult: $440/month
• Couple (2 adults): $790/month
• Family of 3 (2 adults + 1 child): $1,050/month
• Family of 4 (2 adults + 2 children): $1,270/month

All figures are scaled by each city's cost-of-living index to reflect local grocery and food service price variation.

6. Salary Benchmarks & Percentiles

Job-level salary ranges and percentile data are sourced from the Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) survey. National and metropolitan-area medians, 10th, 25th, 75th, and 90th percentile wages are published annually each May for the prior reference year.

7. Assumptions & Limitations

• Single filer unless otherwise specified
• No dependents assumed
• No tax credits (EITC, child, education) included
• No itemized deductions — standard deduction only
• No state-specific credits or exemptions beyond standard deduction
• No pre-tax deductions (401k, HSA) unless specifically modeled

Because individual tax situations vary significantly, actual take-home pay will differ from these estimates. Use our results as a directional guide, not a precise tax calculation.