Finally, subtract your taxes and deductions from your gross pay
The final step is to take your salary, divide it by 12, and then subtract all of your taxes and payroll deductions. The result of this calculation will be your monthly take-home pay.
If this calculation seems rather complicated, the IRS has an online payroll calculator that can do the math for you so you'll know where the number on your paycheck is coming from.
An example
To illustrate this, let's consider an example. Let's say that you just got a new job with a starting salary of $60,000. For this calculation, we'll assume you are single, and claim just one exemption. You have agreed to contribute 5% of your salary to your new employer's 401(k) on a pre-tax basis. So your taxable income is: