Your First U.S. Paycheck, Line by Line

Your first US paycheck is going to look smaller than gross salary divided by pay periods — for a single filer, usually 20-30% smaller, before you even get to 401(k) or insurance deductions. Up to four separate withholdings account for that gap: federal income tax, Social Security tax, Medicare tax, and, in most states, state income tax. What actually applies to you, and how much of it, depends heavily on your visa status and tax residency — details most generic “how paychecks work” articles skip entirely.

The four line items, in the order they get calculated

Federal income tax withholding is your employer’s running estimate of what you’ll owe in federal income tax for the year, spread across your pay periods. It’s calculated from your Form W-4 (filing status, dependents, any extra withholding you’ve requested) run through IRS withholding tables. For 2026, that calculation starts from a $16,100 standard deduction for a single filer, and the remaining taxable income is taxed at 10% up to $12,400, 12% up to $50,400, 22% up to $105,700, and higher rates above that.

Social Security tax is a flat 6.2% of wages, withheld up to the annual wage base of $184,500 for 2026 — after that it simply stops for the rest of the year. Medicare tax runs 1.45% of all wages with no cap at all, plus an extra 0.9% on wages above $200,000 for a single filer ($250,000 married filing jointly). Together, these two make up FICA, and for most H-1B and green card holders they apply exactly the way they’d apply to a US citizen.

State income tax depends on where you work, not just where you live. Nine states charge no state income tax on wages at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Everywhere else runs its own progressive bracket system, separate from the federal one — California’s, for instance, climbs from 1% to 12.3%, with an extra 1% surcharge on taxable income above $1,000,000. Two software engineers on the exact same salary can end up with take-home pay that differs by several thousand dollars a year, purely because of which of those nine states their paycheck comes from.

The FICA exemption most immigrants don’t realize they have

This is where a US paycheck genuinely diverges for a large share of this audience. Nonresident aliens in F-1 status — including while working on CPT or OPT — are exempt from Social Security and Medicare tax under IRC Section 3121(b)(19), as long as the work is authorized and the person is still a nonresident alien for tax purposes (meaning they haven’t yet passed the Substantial Presence Test). In practice: if you’re on OPT and your paystub shows 6.2%/1.45% FICA coming out anyway, that’s almost always a payroll system error, not something you actually owe. Payroll software regularly defaults F-1 students into the standard withholding profile without checking visa status. Flag it with HR or payroll, and if it doesn’t get corrected going forward, you can request a refund of the wrongly withheld FICA using Form 843.

That exemption ends the moment your tax residency status changes — typically when you convert to H-1B and start racking up days toward the Substantial Presence Test, or once you’ve spent long enough in F-1 status (generally more than 5 calendar years) to become a resident alien regardless of visa. From there, FICA applies exactly as it would for a US citizen in the same role, with no phase-in period.

The India-specific wrinkle: Article 21(2)

Most nonresident aliens filing Form 1040-NR can’t claim the standard deduction, which trips up a lot of international students. Indian students and business apprentices get a specific, treaty-based exception: under Article 21(2) of the U.S.-India Income Tax Treaty, an Indian F-1 student or trainee filing as a nonresident alien can claim the same standard deduction a US citizen gets, rather than being stuck with itemized deductions only. It’s a real, IRS-recognized benefit that most other nonresident students — say, from China or most of Europe — simply don’t have.

Here’s the catch, and the reason it belongs in a paycheck article specifically: this benefit is claimed on your tax return, not built into your paycheck withholding. Employer payroll systems apply the standard nonresident-alien W-4 rules to everyone regardless of treaty eligibility, which per IRS Notice 1392 requires nonresident aliens to file as Single (regardless of actual marital status) and add a fixed additional amount to their wages purely for withholding-calculation purposes. The practical effect for a lot of Indian students on F-1/OPT: withholding runs a little higher than what they’ll actually owe once the Article 21(2) deduction is applied at filing, so they end up with a refund instead of a balance due. Treat that as a cash-flow fact worth knowing, not a reason to fiddle with withholding mid-year — NRA withholding elections are easy to get wrong and hard to unwind.

See your own numbers

What goes wrong if you skip all this

None of this replaces a tax professional who actually works with nonresident and dual-status returns — Form 1040-NR and the Substantial Presence Test carry enough edge cases that one wrong assumption compounds across a whole tax year. But knowing which of these four line items applies to you, and why, is what turns that conversation into something useful instead of guesswork. If you’re mid-transition from OPT to H1B (or beyond), our guide to what changes financially at each visa stage covers the rest of what shifts alongside your withholding.