Understanding US take-home pay
Your gross salary is a headline number that almost no one actually receives. Between your employer’s payroll department and your bank account sit three separate layers of tax: federal income tax, federal payroll tax (FICA, which funds Social Security and Medicare) and — in most states — state income tax. Take-home pay, sometimes called net pay, is what remains after those deductions. It is the figure that determines your real standard of living, your mortgage affordability and how much you can save or invest. For internationally mobile professionals and high-net-worth individuals moving between the United States and the United Kingdom, understanding this net figure is the first step in a much larger cross-border planning conversation.
Federal income tax: a progressive, marginal system
The US federal income tax is progressive. Income is divided into bands, and each band is taxed at its own rate — from 10% on the first slice of taxable income up to 37% on income above the top threshold. Critically, moving into a higher bracket does not tax all of your income at that rate; only the portion that falls within the band is taxed at the band’s rate. This is why your effective tax rate — total tax divided by total income — is always lower than your top marginal rate. Before those brackets apply, you subtract the standard deduction ($15,000 for a single filer in 2025), which shelters the first tranche of income entirely.
Filing status materially changes the outcome. A married couple filing jointly enjoys a doubled standard deduction and wider brackets, which is why a single earner in a married household keeps significantly more of the same gross salary than a single filer. Head-of-household status sits in between, offering relief to unmarried taxpayers who support dependants.
FICA: Social Security and Medicare
Separate from income tax, every employee pays FICA. The Social Security portion is 6.2% of wages, but only up to an annual wage base — $176,100 in 2025. Earnings above that cap are not subject to Social Security tax, which means very high earners see their marginal FICA burden fall once they cross the base. The Medicare portion is 1.45% on all wages with no ceiling, and an Additional Medicare Tax of 0.9% applies to wages above $200,000 (single or head of household) or $250,000 (married filing jointly). Your employer matches most of these contributions, but only the employee half reduces your take-home pay.
State income tax: where you live changes everything
State income tax is the single biggest lever on your net pay that geography controls. Nine states — including Texas, Florida, Washington, Nevada and Tennessee — levy no broad tax on wage income at all. Others apply a simple flat rate: Pennsylvania at 3.07%, Illinois at 4.95%, Colorado at 4.4%. At the other end, California and New York operate steeply progressive systems where high earners face marginal rates well above 9%. On a $250,000 salary, the difference between a Texas resident and a California resident can exceed $20,000 a year in state tax alone. This calculator applies a simplified representative state rate so you can see the impact quickly; the true calculation involves each state’s own deductions, credits and brackets.
Take-home pay by state: an illustrative comparison
The table below shows how the same $150,000 single-filer salary translates into take-home pay across four representative states, using the estimates in this tool. Figures are rounded and for illustration only.
| State | State rate | Est. state tax | Est. net annual | Take-home % |
|---|---|---|---|---|
| Texas / Florida | 0% | $0 | ~$113,900 | ~76% |
| Pennsylvania | 3.07% | ~$4,100 | ~$109,800 | ~73% |
| New York | ~6.85% | ~$9,200 | ~$104,700 | ~70% |
| California | ~9.3% | ~$12,600 | ~$101,300 | ~68% |
Illustrative only. Assumes 2025 single-filer federal brackets, the $15,000 standard deduction and FICA on a $150,000 salary. Actual state tax depends on each state’s own rules.
The cross-border dimension: why net pay is only half the story
For most US employees, the take-home figure above is the end of the story. For the clients Jungle Tax works with — US citizens living in the UK, British professionals on US assignment, founders with income on both sides of the Atlantic, and high-net-worth families with globally diversified wealth — it is only the beginning. The United States is one of the very few countries that taxes its citizens on their worldwide income regardless of where they live. That means a US citizen drawing a UK salary still has a US filing obligation, and vice versa. Without careful planning, the same dollar of income can be exposed to tax in two systems at once.
In practice, double taxation is usually avoided through the US-UK tax treaty, the Foreign Earned Income Exclusion and the Foreign Tax Credit, which allow tax paid in one country to offset liability in the other. But the interaction is intricate: the timing of income, the classification of pensions and equity compensation, the treatment of Social Security under the totalization agreement, and the remittance-basis rules for UK residents all affect the outcome. A simple take-home calculator cannot capture any of this — which is precisely why cross-border individuals should treat a net-pay estimate as a starting point, not a conclusion.
How high-net-worth individuals optimise their take-home pay
Beyond geography and filing status, the largest gains in net pay usually come from structuring compensation efficiently. Pre-tax retirement contributions (a 401(k) or traditional IRA), health savings accounts, employer-sponsored benefits and deferred compensation all reduce federal taxable wages, and often state tax too. For business owners, the choice between salary and distributions, the use of an S-corporation, and the timing of bonuses can shift tens of thousands of dollars from tax to take-home. For globally mobile clients, the interplay between US and UK reliefs adds another layer of opportunity — and complexity. This is the work our specialist accountants do every day: turning a headline salary into the maximum sustainable net position across both jurisdictions.
Get a precise picture of your net position
Jungle Tax are specialist US and UK cross-border accountants for high-net-worth individuals and businesses. Speak to our team to model your true take-home pay across both tax systems.