How to Calculate Net Pay. When you change jobs or receive a pay raise, the gross and net pay will change due to a number of factors. A new employer may not offer the same fringe benefits or employee contributions as your former employer. When you receive a pay raise, some deductions from gross wages will increase because they are based on a percentage of the total amount.
Review the required deductions from your gross pay which are based on a percentage of the gross amount. These will primarily be Social Security taxes (FICA) and the Medicare tax.
Calculate your FICA and Medicare taxes by subtracting health and dental insurance from your gross pay for the period and applying the FICA tax rate of 6.2 percent and the Medicare rate of 1.45 percent to the balance. If your FICA wages have exceeded the maximum for the year, skip that computation.
Determine your retirement plan contribution for the pay period based on the new gross pay amount. This is usually a percentage of the gross pay, not to exceed the allowed annual amount.
Check the withholding tax rate for your federal taxable wages after deducting pre-tax items and taking your claimed exemptions and filing status into account.
Compute your federal and state tax withholding for the pay period and subtract those amounts along with health and dental insurance, retirement plan contributions, FICA and Medicare taxes and any other withholdings from your gross pay to arrive at net pay.