Your gross pay and your take-home pay are two very different numbers. Between FERS, Social Security, Medicare, federal and state taxes, FEHB, and TSP, a significant chunk of your paycheck goes to deductions before it hits your bank account. Here’s a complete breakdown of what comes out and why.
Want to skip the math? Our calculator does it all automatically with current March 2026 pay scales.
Open the Pay Calculator →Step 1: Find Your Gross Pay
Your gross biweekly pay is your annual salary divided by 26. To find your annual salary, look up your craft, grade, and step on the current pay scale. As of March 7, 2026, the pay scales reflect the latest general wage increases and COLAs.
For example, a PS-06 Step D Clerk earns $66,832 annually, which is $2,570.46 per pay period before any deductions or premium pay.
Step 2: Add Premium Pay (If Applicable)
Your base hourly rate is your annual salary divided by 2,080 hours. Premium pay is calculated from this base rate:
Overtime (O/T): 1.5 times your base hourly rate for hours over 8 in a day or 40 in a week.
Penalty Overtime (V-Time): 2 times your base hourly rate for hours over 10 in a day or 56 in a service week. This is the “double time” that carriers and clerks hit during peak season or mandation.
Night Differential: An additional 10% of your base rate for hours worked between 6 PM and 6 AM.
Sunday Premium: An additional 25% of your base rate for non-overtime hours worked on Sunday.
Holiday Worked: Your base straight-time rate on top of your regular holiday pay, effectively giving you double time for hours worked on a federal holiday.
Step 3: Calculate Deductions
Here’s where the money goes:
FERS Retirement: This depends on when you were hired. Employees hired before 2013 pay 0.8% of base pay. Those hired in 2013 (FERS-RAE) pay 3.1%. Those hired 2014 or later (FERS-FRAE) pay 4.4%. This is a meaningful difference — on a $65,000 salary, the difference between 0.8% and 4.4% is about $2,340 per year.
Social Security (OASDI): 6.2% of your gross pay, up to the wage base of $176,100. Most postal employees won’t hit this cap, but high-overtime earners or EAS employees at higher grades might.
Medicare: 1.45% of all gross pay with no cap.
Federal Income Tax: Calculated based on your taxable income (gross minus pre-tax deductions like TSP), filing status, and the standard deduction. This is typically the largest single deduction.
State Income Tax: Varies by state. Nine states have no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). Pennsylvania is a flat 3.07%. States like California and New York take considerably more.
FEHB (Health Insurance): Your premium depends on your plan and enrollment type (self, self plus one, family). This is a pre-tax deduction.
TSP (Thrift Savings Plan): Your elected contribution amount. USPS matches up to 5% of your base pay for career employees. You can contribute as a dollar amount or a percentage per pay period. The 2026 annual contribution limit is $23,500 ($31,000 if 50 or older with catch-up contributions).
Step 4: The Math
Net Pay = Gross Pay + Premium Pay − FERS − Social Security − Medicare − Federal Tax − State Tax − FEHB − TSP − Other Deductions
For our PS-06 Step D Clerk with no overtime, married filing jointly in Pennsylvania, contributing $500/PP to TSP, paying $175/PP for FEHB, and hired before 2013:
Their estimated net pay comes out to roughly $1,780 per pay period, or about $46,280 per year — compared to the $66,832 gross. That’s an effective deduction rate of about 31%.
Every craft, every grade, every step. Current March 2026 rates with all deductions calculated automatically.
Calculate Your Take-Home Pay →Non-Career Employees
If you’re a PSE, CCA, MHA, or RCA, your deductions look different. Non-career employees generally don’t contribute to FERS, have limited FEHB options (USPS contributes less toward premiums), and don’t receive TSP matching. This means your deductions are lower, but so are your benefits. Our calculator flags these differences automatically when you select a non-career craft.
Tips to Maximize Your Take-Home Pay
Review your W-4: If you’re getting a large tax refund every year, you’re overwithholding. Adjust your W-4 to keep more money in each paycheck.
Contribute enough for the full TSP match: If you’re not contributing at least 5%, you’re leaving free money on the table. The agency match is essentially a guaranteed 100% return on your first 5%.
Compare FEHB plans during Open Season: Premiums vary dramatically between plans. A cheaper plan with a higher deductible might save you hundreds per year if you’re generally healthy.