Why the paycheck falls by less than the contribution
A traditional 401(k) or 403(b) deferral is taken out before federal and Georgia income tax are figured, but not before Social Security and Medicare. Federal withholding follows IRS Publication 15-T, which applies the W-4 to wages after pre-tax deferrals, and Georgia's Department of Revenue percentage method works the same way, so both taxes fall when the contribution rises (IRS Pub. 15-T; GA DOR withholding guide). This calculator runs the same engine as the Georgia paycheck calculator twice, once at each rate, and lines the paychecks up.
Worked example (pre-filled). On a $65,000 salary paid biweekly, single, G-4 status A, going from 0% to 6% puts $150.00 into the plan each paycheck. Take-home falls by only $124.52, because federal and Georgia withholding drop by $25.48. Each dollar contributed costs 83.0% of take-home. Over a year that is $3,900.00 saved for a $3,237.52 reduction in take-home, and a 100% employer match on the first 3% of salary adds $1,950.00, for $5,850.00 into the plan.
The 2026 elective deferral limit is $24,500 (IRS Notice 2025-67); the calculator caps contributions there and does not include age-50 catch-up amounts. Roth 401(k) contributions are after-tax and would reduce take-home by the full amount; enter them in the paycheck calculator's after-tax field instead. Withholding is not final tax; the year-end return settles the difference. This page computes; it does not recommend a loan, lender, investment or tax position.
Formula and assumptions
income-tax wages = gross − contribution; FICA wages = gross (unchanged)
federal = Pub. 15-T Worksheet 1A on income-tax wages; Georgia = DOR percentage method on income-tax wages
take-home = gross − contribution − federal − Social Security − Medicare − Georgia
match = min(contribution, salary × cap%) × match%
- Assumes no other pre-tax or after-tax deductions, W-4 with no Step 2–4 entries, and zero G-4 allowances.
- 2026 figures: federal tables from IRS Pub. 15-T, Georgia 4.99% with the June 2026 DOR tables, Social Security 6.2% to $184,500, Medicare 1.45%.
Frequently asked questions
How much does a 6% 401(k) contribution reduce my paycheck?
Less than 6%. On $65,000 paid biweekly (single, no other deductions), a 6% deferral of $150 lowers take-home by about $125, because federal and Georgia withholding fall by about $25.
Does a 401(k) contribution reduce Social Security tax?
No. Traditional 401(k) deferrals are excluded from federal and Georgia income-tax wages but remain subject to Social Security and Medicare.
Does Georgia tax 401(k) contributions?
Not when contributed. Georgia starts from federal adjusted gross income, so a pre-tax deferral reduces Georgia taxable wages and withholding.
What is the 2026 401(k) contribution limit?
$24,500 in elective deferrals under IRS Notice 2025-67, not counting catch-up contributions for people 50 and older.
Is the employer match taxed?
Not when it is made. Matching contributions go into the plan pre-tax and are taxed on withdrawal.
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Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods
- Georgia Department of Revenue, Employer’s Withholding Tax Guide 2026 (revised June 2026)
- IRS Notice 2025-67 (2026 retirement plan limits)
- IRS Publication 15 (2026), Employer’s Tax Guide (Circular E)
This calculator gives general estimates from the figures you enter. It is not tax, legal, payroll or financial advice. See our disclaimer.