How a 401(k) changes your take-home pay in 2026
Worked examples (single filer, federal view, 6% deferral)
| Salary | You contribute | Paycheck drops by | Tax saved |
|---|---|---|---|
| $60,000 | $3,600 | $3,168 | $432 |
| $100,000 | $6,000 | $4,680 | $1,320 |
| $150,000 | $9,000 | $6,840 | $2,160 |
Add your state in the paycheck calculator and the saving grows further, since almost every income-tax state honors the deferral. The notable exception is Pennsylvania, which taxes 401(k) contributions on the way in.
What a 401(k) never reduces
Social Security and Medicare are charged on your pay before the deferral, so 7.65% of the contributed dollars still comes out, or only the 1.45% Medicare share on pay above the $184,500 Social Security wage base (plus 0.9% Additional Medicare above $200,000 for single filers). That is also why W-2 box 1 and box 3 differ at year end. Roth 401(k) contributions reduce nothing today; they buy tax-free withdrawals instead.
The match comes first
An employer match is an instant, guaranteed return on every matched dollar, before any market growth. Contributing at least up to the full match is the rare free lunch in personal finance; whether to go beyond it depends on your bracket today versus in retirement. This is general information, not financial advice.
Limits for 2026
The employee deferral limit is $24,500 across traditional and Roth combined. Catch-up contributions for 50+ come on top, and employer match does not count against your employee limit. Our calculator caps the input at the employee limit automatically.
Frequently asked questions
Does my 401(k) lower Social Security or Medicare tax?
No. FICA applies to pay before the deferral, and your future Social Security benefit is unaffected by contributing.
Why did my paycheck drop by less than my contribution percentage?
The contribution escapes federal and usually state income tax at your top rate, so net pay falls by the contribution minus that tax.
Traditional or Roth 401(k)?
Traditional helps today at your current marginal rate; Roth helps later. Many people split. The calculator models the traditional side, which is what changes 2026 take-home.
2026 limits per IRS; examples computed with our tested US engine. Last updated 2026-11-04.