Federal Income Tax

• Everyone who earns income throughout the year must pay federal income tax on the amount that they earned. The tax rate that applies to your income depends on your tax bracket. Each tax bracket encompasses a specific minimum and maximum income level. For example, if you made up to $8,375 in 2010, your federal tax rate would be 10 percent. If you earned between $8,375 and $34,000, you would be taxed at 15 percent for all income that you earned over the initial $8,375 and the remaining amount would be taxed at 10 percent. Current tax brackets can be found on the Internal Revenue Service website.
  
  

Social Security and Medicare Tax

• Each individual who earns an income is required to pay separate Social Security and Medicare taxes on their earnings. This rate can vary depending upon your specific situation. As of January 2011, employees were required to pay 5.65 percent of their income to Social Security and 1.45 percent for Medicare. Individuals who are self employed are required to pay 12.4 percent to Social Security and 2.9 percent for Medicare. The reason for the discrepancy is due to employer contributions, which lower the tax burden for employees. Current Social Security and Medicare tax rates can be obtained by contacting the Internal Revenue Service.
  
  

State Income Taxes

• Many states require citizens to pay a separate income tax on earnings acquired within the state. As of January 2011, nine states did not impose an income tax: New Hampshire, Tennessee, Florida, South Dakota, Wyoming, Texas, Washington and Alaska. The remaining states have income tax rates that vary from 1 percent to 11 percent depending upon your gross income. You can find out the tax rates for your state by contacting your state's Department of Revenue.
  
  

Local Taxes

• Many states have given towns, cities and counties the authority to collect an additional income tax at the local level to pay for schools and other community services. Local rates are typically lower than the state income tax rate. You can find your local income tax rate by contacting your city or county taxing authority.
  
  

Tax Burden Calculation

• You can determine the percentage of taxes that will be taken out of your paycheck each pay period by multiplying the specific tax rates that apply to you by your gross income; then divide the product of that equation again by your gross income. Multiplying this product by 100 will give you the total percentage of your tax burden. For example, if you owe 33 percent for federal taxes, 3 percent for state taxes and 1 percent for local taxes, you would pay a total of $18,500 in taxes if you made $50,000 per year. Your total tax burden would be 37 percent of your gross income.