Spouse to Work Calculator
This calculator is designed to help you see the financial impact of adding, or removing, a spouse's income to your household. As with any decision of this type, there are many factors to consider, but knowing your finances is a good place to start. This calculator has been updated to use the new withholding schedules for 2012.
- Pay Period. This is how often you are paid. Your selections are: Weekly (52 paychecks per year), Every other week (26 paychecks per year), Twice a month (24 paychecks per year), Monthly (12 paychecks per year), and Annually (one paycheck per year).
- Gross Pay. This is your gross pay, before any deductions, for the pay period. Please enter a dollar amount from $1 to $1,000,000.
- Number of Allowances. When your Federal income tax withholdings are calculated, you are allowed to claim allowances to reduce the amount of the Federal income tax withholding. In 2012, each allowance you claim is equal to $3,800 of income that you expect to have in deductions when you file your annual tax return. The number of allowances you should claim depends largely on the number of dependents you have and your itemized deductions. This calculator allows from 0 to 99 allowances.
- 401(k)/403(b) Plan Withholding. This is the percent of your gross income you put into a taxable deferred retirement account such as a 401(k) or 403(b). While increasing your retirement account savings does lower your take home pay, it also lowers your Federal income tax withholdings. The impact on your paycheck might be less than you think. While your plan may not have a deferral percentage limit, this calculator limits deferrals to 80% to account for FICA (Social Security and Medicare) taxes. Please note that your 401(k) or 403(b) plan contributions may be limited to less than 80% of your income. Check with your plan administrator for details. For 2012 the maximum contribution to a 401(k) or 403(b) is $17,000 per year for individuals under 50 and $22,500 for individuals 50 or older.
- State and Local Taxes. This is the percentage that will be deducted for state and local taxes. We take your gross pay, minus $3,800 per allowance, times this percentage to calculate your estimated state and local taxes. Please note, this calculator can only estimate your state and local withholdings.
- FICA OASDI. FICA Old Age Survivors and Disability Insurance. For 2012, FICA OASDI is calculated as your gross earnings times 4.2%. This is a temporary reduction from 6.2%. This tax may revert back to 6.2% as early as March 2012. Please note that this calculator does not make any assumptions as to the total FICA OASDI paid for the current year. For 2012, incomes over $110,100 that have already had the maximum FICA OASDI amount of $4624.20 withheld will not have additional FICA OASDI withholdings.
- FICA Medicare. FICA Medicare is calculated as the gross earnings times 1.45%. Unlike FICA OASDI, there is no annual limit to FICA Medicare deductions.
- Additional Expenses When Spouse Works. These are any additional expenses that you expect to pay when your spouse works. All of the expenses should be entered as the amount per pay period.
- Federal Tax Withholding Calculations.Federal incometaxwithholdings were calculated by:
- Multiplying taxable gross wages by the number of pay periods per year to compute your annual wage.
- Subtracting the value of allowances allowed (for 2012, this is $3,800 multiplied by withholding allowances claimed).
- Determining your annual tax by using the tables below (single and married rates, respectively).
- Dividing the amount of tax by the number of pay periods per year to arrive at the amount of federal withholding tax to be deducted per pay period.
Single Withholding Rates*
|Annual taxable income between these amounts||Annual withholding||Withhold additional % of income over this amount|
|$0.00 - $2,150.00||$0.00|
|$2,150.00 - $10,850.00||$0.00||Plus 10% of income over $2,150.00|
|$10,850.00 - $37,500.00||$870.00||Plus 15% of income over $10,850.00|
|$37,500.00 - $87,800.00||$4,867.50||Plus 25% of income over $37,500.00|
|$87,800.00 - $180,800.00||$17,442.50||Plus 28% of income over $87,800.00|
|$180,800.00 - $390,500.00||$43,482.50||Plus 33% of income over $180,800.00|
|$390,500.00+||$112,683.50||Plus 35% of income over $390,500.00|
|Source: Notice 1036 (Rev. December 2011) Income Tax Withholding Tables for 2012|
Married Withholding Rates*
|Annual Taxable Income Between These Amounts||Annual Withholding||Withhold additional % of income over this amount|
|$0.00 - $8,100.00||$0.00|
|$8,100.00 - $25,500.00||$0.00||Plus 10% of income over $8,100.00|
|$25,500.00 - $78,800.00||$1,740.00||Plus 15% of income over $25,500.00|
|$78,800.00 - $150,800.00||$9,735.00||plus 25% of income over $78,800.00|
|$150,800.00 - $225,550.00||$27,735.00||Plus 28% of income over $150,800.00|
|$225,550.00 - $396,450.00||$48,665.00||Plus 33% of income over $225,550.00|
|$396,450.00+||$105,062.00||Plus 35% of income over $396,450.00|
|*Source: Notice 1036 (Rev. December 2011) Income Tax Withholding Tables for 2012|