The complete guide
What’s taken out of a Michigan paycheck: an overview
From gross to net, a Michigan paycheck passes through pre-tax deductions, federal income tax, FICA, the state’s 4.25%, and possibly a city tax. Here is every line explained, top to bottom.
Your pay stub is a receipt for a whole chain of calculations, and most of them happen before your net pay appears. This guide walks every line of a Michigan paycheck in 2026 — what it is, what it’s computed on, and why the number is what it is — using a running example you can reproduce in the calculator.
Reading your stub top to bottom
A typical Michigan pay stub lists, in order: gross pay, pre-tax deductions, taxable wages, then the tax lines (federal, Social Security, Medicare, state, and sometimes city), then after-tax deductions, and finally net pay. The order is the logic: pre-tax deductions come out first because they reduce the taxes that follow.
The two pre-tax buckets are retirement contributions (a 401(k), 403(b) or 457 plan) and benefits like health, dental and vision insurance. Both come out before federal, state and city taxes. Only the health and benefits bucket comes out before FICA.
Once you can name each line, you can reproduce the whole stub by hand — or let a calculator do it in one click.
Gross pay: where it starts
Gross pay is your total earnings for the period before any deductions. If you are salaried, it’s your annual salary divided by the number of pay periods — 26 for biweekly, 24 for semi-monthly, 52 for weekly. If you are hourly, it’s your hourly rate times your hours, plus overtime at 1.5× for hours over 40 in a workweek.
Gross is the number on your offer letter, and it’s also the number everyone misuses. When someone says "I make $70,000," they mean gross. What lands in their bank account is net, which is always less.
The difference between gross and net is the entire subject of this site.
Pre-tax retirement contributions
A traditional 401(k), 403(b) or 457 contribution is taken from your gross before taxes. For 2026, the elective deferral limit is $23,500 (or $31,000 if you’re 50 or older, including the $7,500 catch-up).
The tax effect: a contribution lowers your federal income tax, your Michigan tax and your city tax, because all three are computed on a reduced base. It does NOT lower your FICA — Social Security and Medicare are computed on wages before retirement contributions.
A 6% contribution on a $70,000 salary is $4,200 a year. It reduces federal, state and city tax by roughly $1,300 combined — the "tax saving" — while leaving FICA untouched.
Pre-tax health and benefits
Health, dental and vision insurance premiums paid through payroll are pre-tax. They are taken from gross before federal, FICA, Michigan and city taxes all — because the FICA base is defined as wages minus these benefits.
This is the key difference from retirement contributions: health premiums reduce all four layers, including FICA. Every dollar of pre-tax health premium saves you roughly 25 to 40 cents depending on your bracket.
Flexible spending accounts (FSA) and health savings accounts (HSA) work the same way — contributions come out pre-tax and reduce both income tax and FICA.
Federal income tax
The federal income tax line is computed on your taxable wages: gross minus pre-tax deductions, minus the standard deduction (or itemized deductions if you use them). For 2026, the standard deduction is $16,100 for singles, $32,200 for married couples, and $24,150 for heads of household.
The 2026 brackets for a single filer: 10% to $12,400, 12% to $50,400, 22% to $105,700, 24% to $201,775, 32% to $256,225, 35% to $640,600, and 37% above. The rate on each bracket applies only to income within that bracket.
Your employer withholds using the W-4 you filed. The W-4’s job is to approximate your actual annual tax so you neither overpay nor underpay. On a $70,000 single salary, federal is roughly $6,570 a year.
Social Security and Medicare (FICA)
The next two lines are Social Security at 6.2% and Medicare at 1.45%. Social Security stops once your year-to-date wages reach $184,500 in 2026 — after that, the 6.2% line disappears for the rest of the year. Medicare has no cap.
FICA is computed on wages minus pre-tax health benefits but not minus retirement contributions. That is why your Social Security line is higher than you might expect if you assumed it used your taxable income.
On a $70,000 salary, FICA totals about $5,355 a year (the employee share). Your employer pays an equal amount on top, but that match is not part of your pay.
Michigan state tax
The state line is Michigan’s flat 4.25%, computed on your federal AGI adjusted for Michigan and minus the $5,900 personal exemption per filer. Because the rate is flat, the line is easy to predict: 4.25 cents per dollar of Michigan taxable income.
Retirement income from a 401(k), pension or IRA is excluded from Michigan taxable income up to $67,610 for singles in 2026, which is why many retirees see a very small state line or none at all.
Your employer withholds state tax based on the Michigan withholding table and your claimed exemptions. On a $70,000 single salary with a 6% 401(k), the state line is roughly $2,440 a year.
City income tax
If you live or work in one of Michigan’s 24 taxing cities, the next line is the city income tax — a flat percentage of your wages after pre-tax deductions, at the resident or non-resident rate. The standard resident rate is 1%, with Grand Rapids and Saginaw at 1.5%, Highland Park at 2.0%, and Detroit at 2.4%.
The city line is the easiest one to miss, both on your stub and in a national calculator. A Detroit resident on $70,000 pays about $1,680 a year; a Warren resident pays nothing.
It is withheld by your employer and appears on the stub under the city’s name. If it’s missing and you work in a taxing city, that’s a payroll error worth fixing.
After-tax deductions and net pay
After all taxes come after-tax deductions — items that come out of your paycheck but don’t reduce your taxes. Roth 401(k) contributions, union dues, wage garnishments, and charitable contributions from payroll are common examples.
Net pay is what’s left: gross minus pre-tax deductions minus taxes minus after-tax deductions. It’s the number that lands in your bank account.
The gap between gross and net is typically 20% to 25% of gross for a Michigan worker in a taxing city, and 18% to 22% in a non-taxing city, before any 401(k). The calculator reproduces the entire sequence so you can see exactly where each dollar went.
A full $70,000 example
Run this exact scenario through the calculator: $70,000 salary, single, biweekly, no city tax. Gross per check is $2,692. Pre-tax 6% 401(k) is $162. Federal is about $253 per check, FICA about $206, Michigan about $94. Net is roughly $1,977 per check, about $51,400 a year — 73% of gross.
Now switch the city to Detroit: the stub picks up about $65 per check in city tax, dropping net to about $1,912 per check. Switch to Ann Arbor and the city line disappears entirely.
The same gross, three different nets, purely from the city line. That is the power of a Michigan-specific calculator.
Pre-tax vs. after-tax: the Roth choice
Most Michigan workers face the traditional vs. Roth 401(k) choice, and the state tax is part of the math. With a traditional contribution, you get the 4.25% Michigan saving now (plus the federal saving) and pay Michigan tax on the withdrawal later — though the retirement exclusion means most retirees pay nothing, or very little.
With a Roth 401(k), contributions are after-tax — no Michigan saving now — but withdrawals are completely untaxed by Michigan and federal, because Roth distributions are not included in AGI.
For a worker who expects to retire in Michigan under the exclusion, the traditional account is usually the better value: you get the deduction now and the withdrawal is largely shielded later. The contribution choice on the stub is therefore more than a cash-flow question — it’s a state-tax optimization with Michigan’s specific rules.
Mistakes people make reading their stub
The most common stub mistakes are confusing the FICA base with the federal base, forgetting the city line exists, and treating pre-tax health premiums as if they were part of net pay. A $100 pre-tax health deduction reduces take-home by less than $100 — you still avoid the tax you would have paid on it.
The second is misreading the Social Security line after the wage cap. Once you pass $184,500 for the year, the 6.2% line stops, and net pay jumps noticeably — not because you got a raise, but because Social Security is fully collected for the year.
The third is assuming the state line and city line are the same everywhere. They are separate taxes with separate rates, and the calculator keeps them separate so you can see each one’s contribution to the gap between gross and net.
How to use the calculator to verify your own stub
The fastest way to sanity-check any pay stub is to reproduce it in the calculator. Enter your gross, your pay frequency, your filing status, your claimed exemptions and your pre-tax deduction amounts. Set the city and residency to match your situation, and compare every line: federal, FICA, state and city.
Expect small differences between the calculator and your stub. The calculator models the true annual tax; your employer’s withholding tables add rounding and proration. A difference of a few dollars per period is normal. A difference of tens of dollars on the same line, consistently, is a flag — check your W-4, your Michigan exemption count, or whether your city withholding was actually set up.
The city line deserves the most attention because it’s the most commonly misconfigured. If you work in Detroit, Grand Rapids or any other taxing city and your stub shows no city line, your payroll is not withholding a tax you owe — fix it before the year ends.
Special situations: second jobs and bonus checks
A second job changes the arithmetic in a way that surprises people. Each employer withholds as if that job were your only income, so a second job gets under-withheld for federal tax — you’ll likely owe at filing unless you bump withholding on the W-4 for the larger job. Michigan’s flat rate and the exemption make the state side less volatile, but the federal side needs attention.
Bonus checks are withheld at a flat supplemental rate — 22% federal on most bonuses under the applicable threshold — plus the usual FICA, Michigan 4.25% and any city rate. That can make a bonus check’s withholding look higher than the bonus’s true tax rate, which is reconciled at filing.
The calculator’s bonus mode applies the 22% supplemental federal rate so you can see what a bonus check nets before it lands.