Should I contribute more to my 401(k) after a raise?

Increasing pre-tax 401(k) contributions reduces your taxable income, effectively offsetting the tax impact of a raise. Many advisors recommend contributing at least enough to get the full employer match.

Can a raise affect my tax credits or deductions?

Yes. Higher income may reduce or eliminate certain tax credits (EITC, Child Tax Credit phase-outs) and could affect eligibility for various deductions and exemptions.

Salary Planning Tool · 2026

Raise Pay Increase Calculator

Q: How much of my raise will I actually take home?

Your take-home portion depends on your tax bracket and state. A 5% raise typically results in 3.5-4% additional take-home pay due to increased federal and state taxes.

Q: Will a raise push me into a higher tax bracket?

Not necessarily. Tax brackets apply only to income within each range, not your entire salary. A raise can move you into a higher bracket, but only the portion above the threshold is taxed at the higher rate.

Q: How does FICA tax affect my raise?

FICA (Social Security + Medicare) takes 7.65% of income up to $168,600 (2026). Amounts above $168,600 only pay the 1.45% Medicare portion.

See exactly how much of your raise you'll actually keep. Compare your current take-home pay against your new salary after federal, state, and FICA taxes — so you know whether that 5% or 10% raise makes a real difference in your bank account.

Educational Use Only This tool provides estimates for educational purposes only. Actual tax withholding depends on your W-4, deductions, credits, and specific tax situation.

Compare Current vs. New Salary

Current Annual Salary

New Annual Salary

Filing Status

State

401(k) Contribution (% of Salary)

Health Insurance (Monthly)

Take-Home Comparison

Current Salary

$65,000/year

Monthly Take-Home

Tax Rate: 0%

New Salary

$75,000/year

Monthly Take-Home

Tax Rate: 0%

Net Monthly Increase

Annual Net Increase: $0

Your take-home pay increases by 0%

Common Raise Scenarios

5% Raise · $60K → $63K

$180/mo extra

Monthly net goes from $4,290 to $4,470. Effective raise: 4.2% after taxes.

10% Raise · $80K → $88K

$475/mo extra

Monthly net goes from $5,576 to $6,051. Effective raise: 8.5% after taxes.

15% Raise · $100K → $115K

$845/mo extra

Monthly net goes from $6,819 to $7,664. Effective raise: 12.4% after taxes.

20% Raise · $120K → $144K

$1,290/mo extra

Monthly net goes from $8,418 to $9,708. Effective raise: 15.3% after taxes.

Calculation Methodology

Data Source: IRS Tax Tables 2026, IRS Publication 15-T. Last Updated: July 2026.

IRS Publication 15-T: Federal Income Tax Withholding Methods

Frequently Asked Questions

How much of my raise will I actually take home?

A 5% raise typically results in 3.5-4% additional take-home pay due to increased federal and state taxes. The exact percentage depends on your tax bracket and state.

Will a raise push me into a higher tax bracket?

Not necessarily. Tax brackets are marginal — only the portion of income above the threshold is taxed at the higher rate, not your entire salary.

How does FICA tax affect my raise?

FICA takes 7.65% up to $168,600 (2026). Above that, only 1.45% Medicare applies. High earners see a lower effective FICA rate.

Should I increase 401(k) contributions after a raise?

Increasing pre-tax 401(k) contributions reduces taxable income, offsetting the tax impact. At minimum, contribute enough to get the full employer match.

Can a raise affect my tax credits?

Yes. Higher income may phase out or eliminate credits like the EITC and Child Tax Credit. Run the numbers carefully if you're near a credit threshold.