Your First U.S. Paycheck, Line by Line

Your first U.S. paycheck will almost always be smaller than gross salary divided by pay periods — usually by 20-30% for a single filer, before any 401(k) or insurance deductions. The gap comes from up to four separate withholdings: federal income tax, Social Security tax, Medicare tax, and (in most states) state income tax. What actually applies to you, and how much, depends heavily on visa status and tax residency in ways that generic “how paychecks work” content doesn’t cover.

The four line items, in the order they’re calculated

Federal income tax withholding is an estimate of your annual federal income tax liability, spread across your pay periods. Your employer calculates it from the information on your Form W-4 (filing status, dependents, any extra withholding) using IRS withholding tables. For 2026, the standard deduction used in that calculation is $16,100 for a single filer, and the resulting 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 — $184,500 for 2026 — after which it stops for the rest of the year. Medicare tax is 1.45% of all wages with no cap, plus an extra 0.9% on wages above $200,000 for a single filer ($250,000 married filing jointly). Together these are FICA taxes, and for most H-1B and green card holders, they apply the same way they apply to U.S. citizens.

State income tax varies by where you work, not just where you live. Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — have no state income tax on wages at all. Most others use their own progressive brackets, separate from the federal ones; California’s, for example, run from 1% up to 12.3%, plus an additional 1% surcharge on taxable income above $1,000,000. A software engineer’s take-home pay on an identical salary can differ by several thousand dollars a year purely based on which of these nine states their paycheck is issued from.

The FICA exemption most immigrants don’t know they have

This is the part of a U.S. paycheck that’s genuinely different 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 employment is authorized and the person is still a nonresident alien for tax purposes (i.e., hasn’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, that’s usually a payroll system error, not a requirement — F-1 students are commonly, incorrectly, defaulted into the standard withholding profile by payroll software that doesn’t distinguish visa status. It’s worth flagging to HR/payroll and, if it’s not corrected going forward, requesting a refund of the erroneously withheld FICA using Form 843.

This exemption ends when your tax residency status changes — typically the moment you convert to H-1B and begin accumulating days toward the Substantial Presence Test, or once you’ve been in F-1 status long enough (generally more than 5 calendar years) to become a resident alien regardless of visa. From that point forward, FICA applies exactly as it does for a U.S. citizen in the same job, with no phase-in.

The India-specific wrinkle: Article 21(2)

Most nonresident aliens filing Form 1040-NR cannot claim the standard deduction — it’s one of the more common surprises for international students generally. Indian students and business apprentices are a specific, treaty-based exception: under Article 21(2) of the U.S.-India Income Tax Treaty, an Indian F-1 student or trainee who is a nonresident alien can claim the same standard deduction available to U.S. citizens, rather than being limited to itemized deductions only. This is a real, IRS-recognized benefit that most other nonresident students — say, from China or most of Europe — don’t have access to.

The catch, and the reason this section matters for a paycheck article specifically: this benefit is claimed on your tax return, not built into your paycheck withholding. Employer payroll systems generally 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 to add a fixed additional amount to their wages for withholding-calculation purposes only. The practical result for many Indian students on F-1/OPT: paycheck withholding runs a bit higher than what they’ll actually owe once the Article 21(2) standard deduction is applied at filing, producing a refund rather than a balance due. That’s a cash-flow fact worth knowing rather than a reason to try to change withholding mid-year — getting NRA withholding elections wrong is easy to do and hard to unwind.

See your own numbers

What goes wrong if you don’t check any of this

None of this replaces a tax professional familiar with nonresident and dual-status returns — Form 1040-NR and the Substantial Presence Test have enough edge cases that a single wrong assumption compounds across a full tax year. But knowing which of these four line items actually applies to you, and why, is what makes that conversation 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.