How to Calculate Gross to Net Income Including 401(k) in South Carolina

by Alia Nikolakopulos, studioD

You can easily determine how much a job pays, but calculating how much of that paycheck actually finds its way into your checking account is a bit more complicated; especially when deductions for other items, such as 401(k) contributions must be considered. Pay you earn in South Carolina is also subject to several types of payroll taxes, which must also be considered to determine your net pay. Fortunately, you can use the same materials your employer uses to calculate your paycheck, which makes the process of calculating your South Carolina take-home pay a bit easier.

Calculate your gross pay for the pay period. If you are paid salary, your gross pay is the same each pay period. If you are paid hourly, multiply the number of hours you work by your hourly wage.

Calculate your 401(k) contribution. If you designate a percentage of your pay each pay period towards the plan, multiply the percentage as a decimal by your gross pay amount. For example, if you contribute 5 percent, multiply your gross salary by .05. The result is your 401(k) contribution for the pay period.

Multiply your gross salary by .0765. The result is your Social Security and Medicare taxes for the pay period. Your 401(k) contributions are subject to these taxes, but exempt from state and federal income tax. Do not subtract the amount of your 401(k) contribution from your gross pay before completing this calculation.

Subtract the amount of your 401(k) contribution from your gross salary. The result is your income that is subject to South Carolina and federal income tax.

Determine your Form W-4 withholding allowances. When you begin a new job, you complete Form W-4 with your filing status and number of exemptions you wish to claim and provide the information to your employer. Your employer uses the information to calculate your state and federal income tax withholding. If you do not remember your W-4 allowances, ask your employer to give your information. Your paycheck stub may also contain your W-4 allowance information. Examples of formats used on paychecks may include “Married – 2,” which translates to a married filing status with two exemptions; or “S-0,” which translates to a single filing status with zero exemptions.

Obtain IRS Publication 15. Find the wage bracket withholding tables located in the back of the publication. Find the table that matches your pay frequency for your filing status. Look up the amount that matches your pay subject to income tax on the table and match the amount to the number of exemptions you claim on Form W-4. The result is your federal income tax.

Download the South Carolina income tax withholding tables from the South Carolina Department of Taxation website. Find your pay frequency table and match your pay subject to income tax with the number of allowances you claim. The South Carolina income tax withholding tables do not consider your filing status. The table result is your South Carolina income tax for the pay period.

Add the amount of your 401(k) contribution and your Social Security, Medicare, federal and state income taxes together. Subtract the result from your gross salary for your pay period. For this step, use the gross salary amount you calculate in Step 1. The result is your net pay.

About the Author

With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.

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