Have you ever compared paychecks with a friend or coworker and realized — you both make the same salary, but you're taking home different amounts? It happens all the time. And no, it's not a mistake. There are real reasons why take-home pay can vary, even when gross salary is identical.
In this post, we'll break down the most common factors that impact what actually lands in your bank account.
1. State Income Taxes
This is the biggest reason two people with identical jobs could see very different net pay. Some states take a significant chunk out of your paycheck — others take nothing at all.
- No income tax states: Texas, Florida, Tennessee, Nevada, Washington, Wyoming, Alaska, South Dakota, New Hampshire
- High tax states: California, New York, New Jersey, Oregon, Minnesota, Connecticut
For example, someone making $70,000 a year in Texas could take home $3,000–$5,000 more per year than someone in California with the exact same job.
See your Texas take-home pay →
See your California take-home pay →
2. Filing Status
Single, married filing jointly, head of household — your filing status changes your federal tax rate. Two coworkers earning $60K can pay different taxes based on how they file.
Example: A married person may pay less in federal income tax because of higher standard deductions and potentially lower tax brackets.
3. Pre-Tax Deductions
Things like health insurance, dental, vision, and retirement contributions are often taken out before taxes. That lowers your taxable income — and your net pay.
Someone who contributes 10% to a 401(k) and pays $400/month in health insurance will take home a lot less than someone with no deductions.
4. Local Taxes
Some cities or counties charge extra taxes. For example, New York City residents pay additional income taxes that someone upstate won't.
Local tax rates don't always show up in job offers, but they show up in your paycheck.
5. Benefits & Withholding Choices
How many allowances did you claim on your W-4? Did you opt into extra life insurance? Are you repaying student loans through payroll deduction?
All of these personal choices impact what's withheld and what you take home.
Quick Comparison Example
Two People Making $65,000:
| Factor | Person A (Texas) | Person B (California) |
|---|---|---|
| Gross Salary | $65,000 | $65,000 |
| State Income Tax | $0 | ~$2,400 |
| Health Insurance Deduction | $150/month | $350/month |
| 401(k) Contribution | 5% | None |
| Net Take-Home Pay | ~$48,900/year | ~$44,300/year |
That's a difference of over $4,600 — just based on location and benefits choices.
Other Factors That Matter
- Number of dependents: More dependents can mean lower taxes
- Student loan interest: May be deducted pre-tax through some employers
- Commuter benefits: Pre-tax transit or parking passes
- HSA contributions: Health Savings Account contributions reduce taxable income
- Additional voluntary deductions: Union dues, charitable giving, etc.
Check Your Own Numbers
Want to know what your take-home pay should be? Use our free calculator to estimate your 2025 paycheck in any state:
➡️ Try the Paycheck Calculator
State-by-State Comparison
See how the same salary compares across different states:
- Texas Calculator (No state income tax)
- California Calculator (High state tax)
- Florida Calculator (No state income tax)
- New York Calculator (High state tax)
- Compare All 50 States
Final Thoughts
When it comes to your paycheck, it's not just about what you earn — it's about what you keep. If your take-home pay seems low compared to others, the answer is usually in the details: taxes, deductions, and choices.
Understanding this is the first step to planning better and negotiating smarter. When comparing job offers, always look at the full picture: salary, location, benefits, and what you'll actually take home.
Want to compare take-home pay in your state? Use our calculator to see how your situation stacks up.