What Changes on Your Paycheck in January

Most paychecks change a little on Jan. 1, 2027: federal income tax is projected to fall for most workers, Social Security tax rises for anyone earning above $184,500, and Medicare stays the same.

Three things move your take-home pay: wider tax brackets, a larger standard deduction, and a higher Social Security wage base. Medicare’s 1.45% rate and the 0.9% Additional Medicare Tax thresholds do not change.

Table 4 shows four worked examples for a single filer paid biweekly. They use the standard deduction and wages only, with no 401(k) and no credits.

At $45,000 the income-tax change is small, about $2.62 a paycheck. At $75,000 it is about $10.79, and at $150,000 about $13.81.

At $250,000 the income-tax cut ($35.50 a paycheck) is bigger than the extra Social Security tax ($18.60), so take-home still rises about $16.90 a paycheck. The squeeze is narrower than it sounds; see high earners.

Bonus checks are withheld differently from regular pay. See How Are Bonuses Taxed.

2027 Standard Deduction vs. 2026

The standard deduction is projected to rise $500 for single and married-filing-separately filers, $1,000 for married couples filing jointly, and $800 for heads of household in 2027.

These are PROJECTED figures from Bloomberg Tax and Wolters Kluwer, not IRS numbers. The official amounts arrive in the IRS’s 2027 Revenue Procedure.

Head of household could land at $24,900 instead of $24,950 if the IRS handles the missing October 2025 inflation reading differently. See when the IRS releases the official numbers.

If you are 65 or older

Filers 65 or older add an extra standard deduction: $2,050 if unmarried and $1,650 per spouse if married in 2026. We estimate about $2,100 and $1,700 for 2027 PROJECTED.

The $6,000 senior deduction is separate and is not indexed to inflation. See the Senior $6,000 Deduction guide.

Example: a married couple, both 65 or older, has a 2026 standard deduction of $35,500 ($32,200 plus two $1,650 amounts). Projected 2027: $36,600 ($33,200 plus two $1,700). The senior deduction comes on top, up to $12,000 for the couple.

2027 Tax Brackets vs. 2026, by Filing Status

The seven tax rates (10% to 37%) stay the same in 2027; only the income ranges move, by about 3.2% in the projection.

Single and married-filing-jointly ranges match the Bloomberg Tax and Wolters Kluwer projections. Head of household and married-filing-separately ranges are AdvoraHQ estimates using the same factor. The IRS may round any threshold up or down by $25 or $50.

A bracket rate applies only to the dollars inside that bracket, not to your whole income. Your effective rate is your total tax divided by your income, and it is always below your top bracket. See How Tax Brackets Work.

Every Number That Changes Jan. 1

Table 2 lists every figure we track that changes on Jan. 1, 2027, with a status on each one.

• OFFICIAL

  Published by the IRS, the Social Security Administration or another agency.

• PROJECTED

  An outside estimate until the agency publishes.

• FIXED BY LAW

  Set by statute, such as the OBBBA, and not by the IRS inflation notice.

• PENDING

  Not announced yet, and we will not guess.

The 401(k), IRA and capital-gains figures come in separate IRS releases, usually between late October and mid-November. The 2026 retirement limits came out Nov. 13, 2025. See 401(k) Limits 2026 and HSA vs FSA 2027.

The Child Tax Credit is $2,200 per child in 2026. The 2027 amount is pending. See the Child Tax Credit guide.

The Numbers That Don’t Change — and Why It Matters

Several amounts from the One Big Beautiful Bill Act (OBBBA) are not indexed to inflation, so they stay exactly the same in 2027 and lose a little purchasing power each year.

For the full rules, see OBBBA Tax Changes 2026, No Tax on Tips and Overtime and the Car Loan Interest Deduction.

How fast a frozen cap erodes

Take the $12,500 overtime cap. If it rose with the projected 3.2% inflation, it would be $12,900 in 2027 ($12,500 × 1.032). Instead it stays at $12,500.

In today’s dollars, $12,500 next year buys what $12,112 buys now ($12,500 ÷ 1.032). That is a loss of $388, about 3.1%, in one year.

At a 22% bracket, a $400 higher cap would be worth about $88 of tax. It is small each year, but it repeats until the deductions end after 2028.

This does not mean your overtime pay is worth less. The cap limits the deduction, and you claim the deduction on your tax return (Schedule 1-A). It does not change your withholding automatically; use your W-4 if you want it reflected.

The Additional Medicare Tax thresholds ($200,000 single, $250,000 joint, $125,000 separate) have never been indexed. The 3.8% net investment income tax uses the same unindexed $200,000 and $250,000 thresholds.

High Earners: Why Your Take-Home May Fall

If your wages are above $184,500, you will pay up to $483.60 more Social Security tax in 2027, because the wage base rises $7,800 to $192,300.

Does it cancel the income-tax cut?

For most earners, no. Take a single filer with wages only and the standard deduction. From roughly $126,000 to $218,000 of wages, the projected income-tax cut is a steady $359 a year.

The Social Security increase passes $359 at about $190,300 of wages and reaches $483.60 at $192,300. Between about $190,000 and $219,000, take-home pay falls by up to roughly $125 a year, about $4.79 per biweekly paycheck.

Above about $218,000, the cut grows because 2026’s 32% bracket starts earlier than 2027’s. By $225,000 it is $923, well above the Social Security increase, and at $250,000 take-home rises about $439 a year.

Two earners filing jointly can hit the same dip when each earns roughly $190,000 to $219,000. In our test, heads of household and single-earner joint filers did not see a drop. These results use PROJECTED brackets, so they could shift when the IRS publishes. Enter your own numbers in the calculator.

The SALT cap in 2027

The SALT deduction cap rises 1% to $40,804 in 2027 ($20,402 if married filing separately) FIXED BY LAW. It applies only if you itemize.

The cap shrinks by 30 cents for every dollar of income above $510,050, down to a $10,000 floor. That floor is reached at income of about $612,730. In 2030 the cap reverts to $10,000. See Year-End Tax Moves.

The 35% and 37% thresholds

In the projection, the 37% rate starts above $661,375 for single and head-of-household filers (from $640,600) and above $793,650 for married couples filing jointly (from $768,700). The 35% rate starts above $264,550 for single filers and $529,100 for joint filers.

Retirees and Near-Retirees

Social Security benefits rise 3.6% in January 2027 OFFICIAL, up from 2.8% in 2026. The average retired worker’s benefit goes from $2,095 to $2,170 a month. See Social Security COLA 2027.

If you claim benefits before full retirement age and keep working, the earnings test limit rises to $25,560 from $24,480 OFFICIAL. Benefits are reduced $1 for every $2 above it.

In the year you reach full retirement age, the limit is $67,920 (from $65,160), and $1 is withheld for every $3 above it OFFICIAL.

The income thresholds that decide how much of your benefit is taxable ($25,000 and $32,000 for the 50% tier, $34,000 and $44,000 for the 85% tier) are not indexed. A COLA can push more of your benefit into the taxable range. See Is Social Security Taxable.

The $6,000 senior deduction and the extra standard deduction for age 65 and older can offset some of that. The senior deduction phases out above $75,000 of income ($150,000 joint).

Your COLA notice: if you have a my Social Security account and signed up for paperless notices by Nov. 18, you can see it online starting in late November. Everyone else gets a paper notice in December.

Investors

The 2027 capital-gains thresholds are PENDING; the IRS publishes them in the same Revenue Procedure as the brackets. See Capital Gains Tax.

For 2026, the 0% rate applies up to $49,450 of taxable income for single filers, $98,900 for married couples filing jointly and $66,200 for heads of household. The 15% rate runs up to $545,500, $613,700 and $579,600, and 20% applies above that.

The annual gift-tax exclusion is projected to rise from $19,000 to $20,000 per recipient PROJECTED. The kiddie tax threshold is projected to rise from $2,700 to $2,800 PROJECTED.

When the IRS Releases the Official Numbers

The IRS publishes inflation-adjusted amounts in an annual Revenue Procedure, and as of Nov. 2, 2026 the 2027 version has not been released.

A Revenue Procedure is IRS guidance that lists more than 60 inflation-adjusted amounts for the next tax year. The 2026 version, Rev. Proc. 2025-32, came out Oct. 9, 2025. Wolters Kluwer expects the 2027 version in late October or early November 2026.

One wrinkle: the Bureau of Labor Statistics never published October 2025 inflation data because of the federal shutdown. The IRS has to decide how to handle that gap, and the choice can move a few figures by one rounding step.

That is why head of household could be $24,950 or $24,900, and why trackers differ by $25 to $50 in the upper brackets.

The day the IRS publishes, we replace every PROJECTED label with OFFICIAL, update the calculator and change the “Last updated” date.

What to Do Now

Work through this December–January checklist, and copy it if you want it in your notes.

1. Run the calculator, then check your first January pay stub against it. Pay stubs reflect withholding, which can differ from the annual estimate.
2. Update your W-4 if your last tax return showed a large refund or balance due, or if you have tips or overtime and want the new deductions reflected in withholding. See the W-4 guide and No Tax on Tips and Overtime.
3. Reset 401(k) contributions to the 2027 limit once announced (projected $25,500). Divide by your paychecks: $25,500 ÷ 26 biweekly paychecks is about $980.77 per check.
4. Reset HSA contributions to the official 2027 limits of $4,500 (self-only) or $9,000 (family), about $173.08 or $346.15 per biweekly check. Add $1,000 if you are 55 or older.
5. Before Dec. 31, use any remaining 2026 room: 401(k) up to $24,500, HSA up to $4,400 or $8,750, a Roth conversion, charitable timing, and SALT prepayments only if you itemize. See Year-End Tax Moves.
6. High earners: expect Social Security withholding to run later into the year, because wages up to $192,300 are taxed.
7. Retirees: look for your COLA notice (online from late November with a my Social Security account and paperless notices; by mail in December) and check whether more of your benefit becomes taxable.
8. Keep this page bookmarked: we update it the day official figures are released.

Frequently Asked Questions

What are the 2027 tax brackets?

The seven rates stay 10%, 12%, 22%, 24%, 32%, 35% and 37%. Projected single ranges: 10% up to $12,800, 12% up to $52,025, 22% up to $109,125, 24% up to $208,325, 32% up to $264,550, 35% up to $661,375, and 37% above. See Table 1 for every filing status.

What is the 2027 standard deduction?

Projected: $16,600 for single and married filing separately, $33,200 for married filing jointly, and $24,950 for head of household ($24,900 is possible). The 2026 official amounts are $16,100, $32,200 and $24,150.

Are the 2027 tax brackets official yet?

No. As of Nov. 2, 2026, the IRS has not published its 2027 Revenue Procedure. Everything labelled PROJECTED on this page is an outside estimate.

When will the IRS release them?

Usually in October or November. The 2026 figures came out Oct. 9, 2025. Wolters Kluwer expects the 2027 release in late October or early November 2026.

Will my paycheck go up in 2027?

For most people, slightly. A single filer earning $75,000 would see about $10.79 more per biweekly paycheck. Your actual change depends on your W-4 and your employer’s payroll system.

Why might my paycheck be smaller in 2027?

Mainly the higher Social Security wage base, if you earn above $184,500: up to $483.60 more tax a year. For single filers earning roughly $190,000 to $219,000, that can outweigh the lower income tax. Benefit costs, a new W-4 or a raise can also change it.

What is the 2027 Social Security wage base?

$192,300 OFFICIAL, up from $184,500. The maximum employee Social Security tax is $11,922.60.

Is the no-tax-on-overtime deduction indexed for inflation?

No. The $12,500 cap ($25,000 joint) and the $150,000 ($300,000 joint) income limit are fixed in law through tax year 2028 FIXED BY LAW.

What is the tips deduction limit for 2027?

$25,000, unchanged FIXED BY LAW. It phases out above $150,000 of income ($300,000 joint).

Does the $6,000 senior deduction change in 2027?

No. It is $6,000 per person age 65 or older through 2028 FIXED BY LAW, phasing out by 6% of income above $75,000 ($150,000 joint). It is separate from the extra standard deduction for age 65 and older.

What is the 2027 SALT cap?

$40,804 ($20,402 if married filing separately) FIXED BY LAW. It shrinks above $510,050 of income, to a $10,000 floor, and reverts to $10,000 in 2030.

What are the 2027 401(k) and HSA limits?

HSA: $4,500 self-only and $9,000 family OFFICIAL. 401(k): projected at $25,500 PROJECTED until the IRS issues its notice.

What are the 2027 capital gains brackets?

Not announced yet PENDING. For 2026 the 0% rate applies up to $49,450 (single) and $98,900 (joint).

Should I update my W-4 for 2027?

Only if your situation changed or your last return showed a large refund or balance due. The IRS’s 2027 W-4 draft had no substantive changes from the 2026 form.

Do the 2027 brackets apply to my 2026 tax return?

No. Income earned in 2026 is taxed under the 2026 brackets, on the return you file in early 2027. The 2027 brackets apply to income earned in 2027.

Do state taxes change too?

This page covers federal tax only. Your state sets its own brackets and deductions, so check your state tax agency.

Sources

• IRS Rev. Proc. 2025-32 (2026 inflation adjustments)
• IRS Rev. Proc. 2026-24 (2027 HSA limits)
• IRS Publication 15-T (federal income tax withholding methods)
• SSA 2027 COLA fact sheet and SSA announcement, Oct. 14, 2026
• Wolters Kluwer: projected 2027 federal tax brackets
• Bloomberg Tax projection of 2027 inflation adjustments, Sept. 11, 2026
• Milliman 2027 IRS limits forecast, via 401(k) Specialist
• Bloomberg Tax: IRS releases 2027 Form W-4 draft; final 2026 withholding tables
• P.L. 119-21 (OBBBA)
• BLS Consumer Price Index (C-CPI-U is the indexing basis)