Current-year tax lift
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The U.S. 2026 limits below stay disabled for review but are source-backed for planning.
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Use Standard unless your employer confirms the plan qualifies for the higher applicable SIMPLE limit.
This affects deductible traditional IRA savings only; Roth IRA eligibility uses its own MAGI phaseout.
Use the status expected on the return for this contribution year.
Used only for contribution limits and catch-up rules.
years
For IRA phaseouts, use MAGI before the IRA deduction. For workplace plans, use eligible annual compensation.
$
Enter the annual amount still being planned, not including employer match.
$
Include employee deferrals or IRA contributions that share the same annual limit.
$
The limit is still capped by annual compensation in the result.
$
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This replaces the standard deduction in the federal bracket comparison.
$
Applied only to the deductible or pre-tax amount.
%
This rate is manual because state retirement contribution treatment varies.
%
Choose Eligible only when age, student, dependent, and recent distribution rules are satisfied.
Pick the formula closest to the plan; Custom exposes a flat match percentage and salary cap.
Example: 50 means the employer adds 50 cents per dollar contributed.
%
Example: 6 means matching stops after employee contributions reach 6% of compensation.
% of pay
Use 26 for biweekly, 24 for semimonthly, 12 for monthly, or the actual remaining payroll count.
periods
Enter 0 if the rule is not relevant or your plan has not confirmed the prior-year wage test.
$
Default keeps payroll tax savings at zero for ordinary retirement deferrals.
The limit table shows both gross and vested match value.
%
This is a planning scenario, not an investment return guarantee.
years
Set 0% for a contribution-only projection.
%
Tax metric Amount Basis Copy
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Paycheck item Per period Annual amount Note Copy
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Tags: Finance, Productivity
Income Tax Calculator Estimate income tax from monthly or annual income, compare bracket slices and scenario changes, and note filing limits before planning payments.
Effective Tax Rate Calculator Calculate an effective tax rate from bracket presets or manual totals, then compare income-tax-only, all-in, marginal, and side-income views.
Paycheck Calculator Estimate U.S. take-home pay from hourly, salary, or per-check gross wages with 2026 federal and FICA tax math, deductions, and warnings.
Payroll Proration Calculator Calculate prorated gross pay for partial pay periods, compare calendar or workday methods, and review day counts, rounding, and warnings.
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Retirement contributions affect the current year before they become a long-term nest egg. A dollar sent to a pre-tax workplace plan can lower taxable income now. A deductible traditional IRA contribution can do the same only when the deduction survives income and coverage rules. A Roth or after-tax contribution may show little or no current tax savings, even though it can still be a deliberate retirement choice.

The useful planning number is not just the deduction. Contribution room, age-based catch-up rules, modified adjusted gross income, employer match, vesting, paycheck timing, and possible credits all change the first-year picture. A contribution that looks expensive as a gross payroll deduction may cost less after withholding falls, while a smaller contribution can be valuable when it captures employer match that would otherwise be missed.

Several terms need to stay separate. Compensation is the pay or earned income that supports a contribution limit. MAGI, or modified adjusted gross income, is used for IRA phaseouts and the Saver's Credit. Marginal tax rate is the tax rate on the next deductible dollar, not the average tax rate on the whole return. Employer match is additional plan money under an employer formula, not a tax deduction.

Tax treatment also affects timing. A pre-tax contribution may reduce current federal taxable income, but ordinary elective deferrals generally do not reduce Social Security or Medicare wages. The Saver's Credit, when available, is a credit claimed on the return rather than a paycheck-by-paycheck reduction. State and local rules can differ from federal rules, so a federal estimate should not be copied into every jurisdiction without checking.

Contribution choice Current tax effect Planning caution
Pre-tax workplace deferral Can reduce current federal taxable income when within the plan limit. Usually does not reduce Social Security or Medicare wages.
Deductible traditional IRA Can reduce current income tax if the contribution is deductible after MAGI phaseout rules. Workplace coverage by the contributor or spouse can reduce the deductible share.
Roth contribution Normally no current deduction, so the income-tax savings line may be zero. Future tax treatment and IRA eligibility rules are separate questions.
After-tax non-Roth contribution No current income-tax deduction in this kind of estimate. Plan-specific conversion and basis rules matter outside the current-year tax view.
Flow from planned retirement contribution through limit room, deductible amount, tax benefit, net cost, and employer match checks

Tax savings can be overread when the comparison stops at the deduction. A Roth dollar may show no current deduction and still be useful if later qualified withdrawals are not taxed. A pre-tax dollar may reduce current tax and increase taxable income in retirement. A contribution that captures an employer match can have a better first-year value than a larger deduction with no match.

A 2026 contribution estimate is a planning aid, not a final return. It can show how a stated contribution fits current IRS limits and how the current-year benefit changes under chosen assumptions. It cannot settle plan eligibility, state conformity, vesting rights, investment results, retirement tax treatment, or whether a taxpayer qualifies for every credit rule outside the entered facts.

The safest first pass is to keep the decision narrow: test one account type, one tax treatment, one filing status, and one contribution amount at a time. Change only one assumption when comparing scenarios so the reason for a better or worse result remains visible.

How to Use This Tool:

Use one tax year and one retirement account profile at a time. The most useful run starts with the contribution limit, then adds tax, credit, match, and projection assumptions.

  1. Set Retirement account and Tax treatment. Workplace plans, SIMPLE plans, IRAs, and manual limits use different 2026 limit rules, while pre-tax, Roth, and after-tax choices decide whether a current deduction is possible.
  2. Enter Filing status, Age at year end, Annual compensation or MAGI before this contribution, Planned employee contribution, and Already contributed this year. The summary badge and Limit & Match tab will show whether the planned amount is capped.
  3. For IRA scenarios, choose IRA workplace coverage. Use the contributor-covered or spouse-covered choice when workplace plan coverage can reduce a traditional IRA deduction; Roth IRA eligibility uses a separate MAGI phaseout.
  4. Choose a Federal tax method. The standard-deduction and custom-deduction bracket methods recompute 2026 federal tax before and after the deductible amount. Manual marginal federal rate applies the entered rate directly.
  5. Add State or local marginal rate only when that jurisdiction gives the same deduction treatment. Set it to 0 when the state rule is unknown, not applicable, or already accounted for elsewhere.
  6. Set Saver's Credit status and, for match-eligible plans, the Employer match formula. Open Advanced for pay periods remaining, prior-year FICA wages for the 2026 Roth catch-up rule, payroll-tax treatment, match vesting, projection years, and annual return assumption.
  7. Read Tax Shield first, then use Paycheck Impact for per-period cost, Limit & Match for warnings, Annual Value Bridge and Savings Path for charts, Source Notes for reviewed IRS source areas, and JSON when the scenario needs to be copied into another record.

If a result shows Contribution capped, Phaseout, No current deduction, Match left, or Roth catch-up rule as applying, fix the named input before relying on the estimate. Excess contribution dollars are excluded from tax-savings math rather than being allowed to inflate the benefit.

Interpreting Results:

Total tax-year benefit is the headline tax result. It adds federal income-tax savings, optional state or local savings, optional payroll-tax savings, and any modeled Saver's Credit. Read it next to Allowed employee contribution and Deductible or pre-tax amount, because an over-limit contribution, Roth treatment, after-tax treatment, IRA phaseout, or forced Roth catch-up amount can shrink the dollars that receive current deduction treatment.

Net tax-year cost is the allowed employee contribution minus the total tax-year benefit. It is not the same as the per-paycheck change. The Paycheck Impact tab separates current withholding savings from the Saver's Credit because that credit is normally settled on the tax return rather than in each paycheck.

  • Federal income tax reduction is strongest when deductible dollars fall in a higher bracket; it can be lower when the deduction crosses into a lower bracket.
  • State or local tax reduction depends entirely on the manual rate entered. A positive number is not proof that the jurisdiction allows the deduction.
  • Vested employer match can be more important than the deduction when a contribution captures match money that would otherwise be missed.
  • Savings Path is a repeated-contribution scenario. It is useful for sensitivity checks, not an investment forecast.

A high tax benefit does not prove that the contribution amount is best for cash flow, and a zero current deduction does not make a Roth contribution poor. Before using the estimate for a payroll or tax decision, verify filing status, MAGI or compensation, YTD contributions, IRA coverage, prior-year FICA wages, state treatment, match formula, vesting percentage, and the contribution shown as allowed.

Technical Details:

Retirement contribution tax savings are governed first by eligibility and contribution room, then by tax treatment. A dollar that is above the annual limit, above compensation, or blocked by an IRA eligibility phaseout cannot receive the same current-year treatment as an allowed deductible dollar. The calculation therefore starts by finding the allowed employee contribution before any tax rate is applied.

Federal income-tax savings are computed from the deductible amount. With the bracket method, 2026 progressive tax is calculated before and after that amount using the selected filing status and deduction base. With the manual method, the deductible amount is multiplied by the entered marginal federal rate. State or local tax savings and payroll-tax savings are separate additions because their rules may differ from federal taxable income rules.

Formula Core

The core limit equation caps the planned contribution by remaining room under the selected 2026 profile.

Allowed contribution = min ( planned contribution , max ( 0 , compensation-capped limit - already contributed ) )

The current-year benefit adds only the tax and credit components modeled for that run.

Total tax-year benefit = federal savings+state/local savings+payroll-tax savings+Saver's Credit Net tax-year cost = allowed contribution-total tax-year benefit

The projection chart uses the future value of repeated annual payments. If the annual return is zero, each component is simply payment times years.

Future value = A ⁢ (1+r) n - 1 r
Symbol or quantity Meaning in the estimate
Planned contribution The employee amount being tested for the year, before the remaining-limit cap.
Compensation-capped limit The selected statutory limit after catch-up rules and the entered annual compensation cap are applied.
Deductible amount The allowed contribution that remains eligible for current income-tax deduction after Roth, after-tax, forced Roth catch-up, and IRA phaseout rules.
A One repeated annual payment in the projection, such as employee contribution, vested match, or saved tax benefit.
r Annual return assumption as a decimal, capped by the entered range.
n Whole projection years.

2026 Limits and Phaseout Rules

Account profile Base employee limit Catch-up treatment Special rule modeled
401(k), 403(b), governmental 457, or TSP $24,500 $8,000 at age 50+, or $11,250 at ages 60 to 63 Defined contribution annual additions are checked against $72,000. Prior-year FICA wages above $150,000 can force catch-up dollars into Roth treatment.
SIMPLE IRA or SIMPLE 401(k) $17,000 standard, or $18,100 for applicable higher SIMPLE plans $4,000 standard, $3,850 for applicable higher SIMPLE plans, or $5,250 at ages 60 to 63 The higher SIMPLE option should be used only when the employer confirms the plan qualifies.
IRA annual limit $7,500 $1,100 at age 50+ Traditional IRA deductibility and Roth IRA contribution eligibility can be reduced by MAGI phaseouts.
Manual retirement plan limit User-entered $0 unless included in the manual limit The allowed contribution is still capped by entered annual compensation.

Traditional IRA deduction phaseouts use the income value as MAGI before the contribution. For a covered single filer or head of household, the 2026 deduction fraction phases from full to zero between $81,000 and $91,000. For a married filing jointly contributor covered by a workplace plan, the range is $129,000 to $149,000. If the contributor is not covered but the spouse is covered, the married filing jointly range is $242,000 to $252,000. Married filing separately remains $0 to $10,000.

Roth IRA eligibility is treated as a contribution cap rather than a current deduction. The 2026 Roth IRA phaseout range is $242,000 to $252,000 for married filing jointly, $153,000 to $168,000 for single or head of household, and $0 to $10,000 for married filing separately.

Tax Benefit Rules

Quantity Rule Interpretation
Deductible or pre-tax amount Allowed contribution minus any forced Roth catch-up amount, multiplied by the traditional IRA deduction fraction when relevant; zero for Roth and after-tax runs. Only this amount can reduce current income-taxable income.
Federal income tax reduction Bracket method: progressive federal tax before the deductible amount minus progressive federal tax after it. Manual method: deductible amount times the entered marginal rate. The bracket method can produce a blended benefit when a deduction crosses bracket boundaries.
State or local tax reduction Deductible amount multiplied by the manually entered state or local marginal rate. The user must verify state or local conformity because it is not looked up.
Payroll tax reduction Federal Insurance Contributions Act (FICA) tax before and after the deductible amount, only when the payroll-tax switch treats the contribution as reducing FICA wages. The default is zero because ordinary retirement deferrals generally do not reduce Social Security or Medicare wages.
Saver's Credit Credit rate from 2026 AGI thresholds times qualified contribution cap, limited by post-contribution federal tax when bracket math is used. A credit reduces tax directly, so it is kept separate from deductions and withholding savings.
Credit rate Married filing jointly AGI up to Head of household AGI up to Single or married filing separately AGI up to
50%$48,500$36,375$24,250
20%$52,500$39,375$26,250
10%$80,500$60,375$40,250
0%Above $80,500Above $60,375Above $40,250

The payroll-tax option uses 2026 employee Social Security tax at 6.2% up to the $184,500 wage base, Medicare tax at 1.45% on covered wages, and Additional Medicare Tax at 0.9% above the applicable filing-status threshold. The Additional Medicare thresholds modeled are $200,000 for single and head of household, $250,000 for married filing jointly, and $125,000 for married filing separately.

Employer Match and Projection Mechanics

Employer match formulas are planning approximations. The built-in formulas model 100% up to 3% of pay, 50% up to 6% of pay, and a safe harbor style match of 100% on the first 3% plus 50% on the next 2%. The custom formula applies a user-entered match percentage to employee contributions up to a user-entered percentage of pay, then applies the vesting percentage for planning value.

The growth scenario projects employee contributions, vested employer match, and saved tax benefits separately, then adds them for the total future value. It assumes the same annual amounts repeat, the same annual return applies each year, and the tax benefit is saved or invested. It does not model salary increases, changing contribution limits, investment volatility, investment fees, plan true-up rules, required minimum distributions, or tax due on future withdrawals.

Step Default scenario value Meaning
Allowed employee contribution $18,000.00 A $125,000 single filer age 42 is below the $24,500 workplace base limit with no YTD contribution.
Deductible or pre-tax amount $18,000.00 The selected pre-tax workplace contribution receives current deduction treatment.
Federal income tax reduction $4,024.00 2026 bracket tax drops from the before-contribution taxable income to the after-contribution taxable income.
State or local tax reduction $900.00 The 5% manual state/local rate is applied to the deductible amount.
Total tax-year benefit $4,924.00 Saver's Credit and payroll-tax savings are zero in this default case.
Vested employer match $3,750.00 A 50% match up to 6% of $125,000 pay matches $7,500 of employee contribution at 50%.

Displayed money values are rounded to cents. Percentages are displayed with one or two decimal places depending on the result area, while limit checks use the unrounded numeric values behind the displayed rows.

Limitations, Privacy, and Accuracy:

This calculator is an educational U.S. federal planning estimate for 2026 assumptions. It is not tax, legal, payroll, investment, benefits, plan administration, or filing advice. IRS guidance, legislation, payroll coding, plan documents, state law, and personal facts can change the final answer.

  • State and local treatment is not researched automatically. The state/local rate is a manual assumption and should be verified separately.
  • IRA phaseouts and Saver's Credit thresholds use the entered income as MAGI before the contribution. Actual MAGI can differ from wages or compensation.
  • Employer match estimates do not replace plan documents, true-up provisions, eligibility rules, vesting schedules, or payroll timing.
  • Ordinary workplace deferrals default to no Social Security or Medicare wage reduction. Enable payroll-tax reduction only when that treatment is verified for the arrangement.
  • Entries are processed in the browser session while using the page. Downloaded CSV, DOCX, chart, or JSON files can still contain sensitive income, tax, contribution, and employer-match assumptions.

Worked Examples:

Pre-tax 401(k) contribution with match

A single employee age 42 earns $125,000, plans an $18,000 pre-tax workplace contribution, has not contributed earlier in the year, uses the 2026 bracket method with the standard deduction, enters a 5% state/local marginal rate, and selects a 50% match up to 6% of pay. The Allowed employee contribution remains $18,000.00, Federal income tax reduction is $4,024.00, State or local tax reduction is $900.00, and Total tax-year benefit is $4,924.00. The Vested employer match is $3,750.00, so the tax result alone understates the first-year value.

Traditional IRA deduction phaseout

A single taxpayer age 50 with workplace coverage and $86,000 of MAGI enters an $8,600 traditional IRA contribution. The age 50 IRA limit allows the contribution, but the traditional IRA deduction phases out from $81,000 to $91,000 for a covered single filer. The Deductible or pre-tax amount is reduced to $4,300.00, and the IRA eligibility row shows Phaseout rather than treating the full contribution as deductible.

Over-limit workplace contribution

An employee under age 50 has already contributed $23,000 to a workplace plan and tests another $5,000 contribution. The 2026 base limit leaves only $1,500 of remaining room, so Allowed employee contribution is capped at $1,500.00 and the Contribution limit row reports Capped. The over-limit $3,500 is excluded from Federal income tax reduction, which is the correct signal to lower the planned contribution or check whether another account profile is being used.

Roth catch-up rule for a higher-wage participant

A 61-year-old workplace plan participant with $170,000 of prior-year FICA wages enters a $32,500 pre-tax contribution. The age 60 to 63 workplace limit is high enough for the contribution, but the prior-year wage input exceeds the $150,000 Roth catch-up threshold. The base $24,500 remains deductible, while the $8,000 catch-up slice is removed from current deduction treatment and the Roth catch-up rule row reports Applies.

FAQ:

Why is my tax savings smaller than my contribution times my tax bracket?

The deductible amount may be lower than the planned contribution because of limits, IRA phaseouts, Roth treatment, after-tax treatment, or forced Roth catch-up treatment. The bracket method can also cross from a higher tax bracket into a lower one, reducing the average benefit across the contribution.

Does a pre-tax contribution reduce each paycheck by the full amount?

No. The gross contribution reduces pay, but current withholding may fall when the contribution is deductible or pre-tax. Check Paycheck Impact for contribution per period, current withholding tax shield per period, and estimated take-home reduction before any year-end Saver's Credit.

Which income number should I enter?

For workplace plans, use eligible annual compensation. For IRA deduction, Roth IRA eligibility, and Saver's Credit checks, use MAGI before the contribution being modeled. If compensation and MAGI differ, run separate scenarios for the rules you need to test.

Why is payroll-tax savings zero by default?

Ordinary 401(k)-style elective deferrals commonly reduce federal income-taxable wages but not Social Security or Medicare wages. Use the payroll-tax switch only when the contribution arrangement has been verified as reducing FICA wages.

What should I do when the result says Contribution capped?

Check Retirement account, Age at year end, Annual compensation or MAGI before this contribution, Planned employee contribution, and Already contributed this year. The calculator applies the remaining limit and excludes any excess amount from tax savings.

Can the Savings Path chart be used as an investment forecast?

Use it as a sensitivity scenario only. It repeats the same annual contribution, vested match, saved tax benefit, years, and return assumption, without modeling market volatility, changing salary, changing IRS limits, fees, future tax rates, or plan investment choices.

Glossary:

Allowed employee contribution
The part of the planned contribution that remains after the selected annual limit, compensation cap, already-contributed amount, and Roth IRA eligibility cap are applied.
Deductible amount
The part of the allowed contribution treated as reducing current income-taxable income for the estimate.
MAGI
Modified adjusted gross income, used here as the income basis for IRA phaseouts and Saver's Credit thresholds.
Catch-up contribution
An extra contribution amount allowed for eligible savers who are age 50 or older, with higher 2026 limits for ages 60 to 63 in covered workplace and SIMPLE plans.
Forced Roth catch-up
The workplace catch-up portion treated as Roth when prior-year FICA wages with the plan sponsor exceed the 2026 Roth catch-up threshold.
Saver's Credit
A federal credit for eligible retirement contributions, subject to age, student, dependent, distribution, contribution, income, and tax-liability limits.
Vested employer match
The portion of modeled employer match counted as planning value after applying the entered vesting percentage.

References: