The short answer
- Gross pay = hourly rate × regular hours + 1.5 × rate × overtime hours, for each week in the pay period.
- Out come federal income tax, 6.2% Social Security, 1.45% Medicare and any state or local tax.
- At $20 an hour, 40 hours, paid every two weeks in Texas, you take home about $1,369 a paycheck.
- That is about $17.12 for every hour you work.
From hourly rate to gross pay
Gross pay is what you earn before anything comes out. Multiply your hourly rate by your hours for the week, add overtime, then multiply by the weeks in your pay period: one for weekly pay, two for biweekly. For pay twice a month, your employer usually works out a yearly figure and divides by 24.
A full-time year is 2,080 hours (40 × 52). At $20 an hour that is $41,600. Use the salary to hourly calculator to compare an hourly job with a salaried one, and the timesheet calculator to add up a week of start and finish times.
A $20-an-hour paycheck, line by line
- Gross pay: $20 × 40 × 2$1,600.00
- Federal income tax−$108.15
- Social Security (6.2%)−$99.20
- Medicare (1.45%)−$23.20
- Texas income tax$0.00
Over a year that is $35,606 of take-home pay from $41,600 of gross pay. About 14.4% goes in tax.
Federal income tax on hourly pay
Your employer turns each paycheck into a yearly figure, takes off the 2026 standard deduction ($16,100 single, $32,200 married filing jointly), works out the tax with the brackets and divides it back to one paycheck. At $41,600 a year, single, the taxable income is $25,500: 10% on the first $12,400 and 12% on the rest, about $2,812 a year or $108.15 a paycheck.
Social Security and Medicare
Social Security takes 6.2% of every dollar you earn, up to $184,500 in 2026, and Medicare takes 1.45% with no cap. Together they are 7.65%: $122.40 of a $1,600 paycheck. There is no standard deduction for these taxes, so they start on your first dollar of pay. Your employer pays the same amount again on top; see the employer payroll tax calculator.
State income tax
Nine states do not tax wages. Elsewhere, the same $20-an-hour job pays less:
California’s figure includes the 1.3% state disability insurance (SDI) taken from wages. Some cities and counties add their own income tax, such as New York City, Philadelphia and many Ohio cities; add it under More options.
Take-home at common hourly rates
| Hourly rate | Gross per paycheck | Take-home per paycheck | Kept per hour |
|---|---|---|---|
| $7.25 | $580.00 | $535.63 | $6.70 |
| $15 | $1,200.00 | $1,048.05 | $13.10 |
| $20 | $1,600.00 | $1,369.45 | $17.12 |
| $25 | $2,000.00 | $1,690.85 | $21.14 |
| $30 | $2,400.00 | $2,012.25 | $25.15 |
| $40 | $3,200.00 | $2,590.82 | $32.39 |
Part-time or full-time
Fewer hours mean a smaller paycheck, but a slightly bigger share kept, because more of your pay sits under the standard deduction. At $20 an hour in Texas, paid biweekly:
| Hours a week | Take-home per paycheck | Share lost to tax | Kept per hour |
|---|---|---|---|
| 20 | $720.72 | 9.9% | $18.02 |
| 25 | $885.42 | 11.5% | $17.71 |
| 30 | $1,048.05 | 12.7% | $17.47 |
| 35 | $1,208.75 | 13.7% | $17.27 |
| 40 | $1,369.45 | 14.4% | $17.12 |
Part-time jobs often come without employer health insurance or a 401(k) match, which can matter more than the tax difference.
Overtime pay
Under the Fair Labor Standards Act, most hourly workers earn at least 1.5 times their regular rate for hours over 40 in a workweek. At $20 an hour, each overtime hour pays $30.
- Week's gross pay
- $800
- Biweekly take-home
- $1,369.45
- Kept per hour
- $17.12
- Week's gross pay
- $950
- Biweekly take-home
- $1,610.50
- Kept per hour
- $17.89
- Week's gross pay
- $1,100
- Biweekly take-home
- $1,851.55
- Kept per hour
- $18.52
Some states, such as California, also pay overtime after 8 hours in a day. The overtime calculator covers daily overtime and double time.
The overtime deduction
From 2025 to 2028 you can deduct the overtime premium, the extra half of time and a half, up to $12,500 a year ($25,000 joint). It lowers federal income tax only, and payroll does not take it into account, so it shows up as a bigger refund or a smaller bill when you file.
- Overtime premium: $10 × 5 × 52$2,600
- Top tax rate12%
With 10 overtime hours a week the premium doubles to $5,200 and the saving to $624.
Why overtime weeks look heavily taxed
Payroll works on each paycheck as if you earned the same every period. A big overtime check is treated as a higher yearly income, so the tax on it looks steep. Over the year it evens out: your real tax depends on your total pay, and anything over-withheld comes back as a refund.
Your after-tax hourly wage
Divide your take-home pay for the year by the hours you work. It is the honest figure for deciding whether an extra shift, a longer commute or a higher-paid job is worth it. At $20 an hour full time in Texas it is $17.12; in California, $16.55.
Compare jobs by take-home per hour
A $22 job with a long unpaid commute can pay less per hour of your time than a $20 job close to home.
Weekly, biweekly or monthly
The same $41,600 a year pays $684.72 a week, $1,369.45 every two weeks, $1,483.57 twice a month or $2,967.13 a month after tax in Texas. The yearly total is the same. Biweekly pay gives two months a year with three paydays.
Unpaid time off
Hourly workers without paid vacation earn nothing in the weeks they do not work. With two unpaid weeks, the $20-an-hour job pays $40,000 a year instead of $41,600, and $34,320 after tax. Set paid weeks under More options to see your year.
401(k) and benefits
A traditional 401(k) comes out before income tax. Saving 6% at $20 an hour, 40 hours, puts $96 a paycheck into your account but cuts take-home by only $84.48. Health, dental and vision premiums through a cafeteria plan come out before Social Security and Medicare too.
Children and your W-4
Listing children on step 3 of Form W-4 lowers withholding by $2,200 a child. A head of household at $20 an hour with two children has no federal income tax withheld at all, and takes home $1,477.60 a paycheck. The child tax credit calculator shows the refundable part you get when you file.
Minimum wage
The federal minimum wage is $7.25 an hour, unchanged since 2009. Most states and many cities set a higher rate, and your employer must pay the highest that applies. Full time at $7.25 is $15,080 a year, below the standard deduction, so no federal income tax is withheld; only Social Security and Medicare come out.
Two jobs
Each employer withholds as if its job were your only one, so each takes off the full standard deduction. Together that can leave too little tax withheld. Use step 2 of Form W-4, or the IRS Tax Withholding Estimator, to fix it. Social Security stops at $184,500 of total pay, but each employer keeps withholding it; any excess comes back on your return.