News & Trending Tax News

Your Paycheck May Be Bigger in 2026 (Even Without a Raise)

Several tax changes could grow your paycheck next year, promotion or not.

By Michelle Smith

Edited by Lisa Dammeyer

Updated Dec. 25, 2025

After another year of inflation and an up-and-down market, you're likely eager for ways to lower your financial stress in the new year. Fortunately for many Americans, some inflation-inspired changes to tax brackets could mean you take a bigger chunk of your paycheck home at the end of every pay period.

Keep reading to learn how certain tax changes could potentially land you a larger paycheck next year, and then explore our top tips for keeping more cash in your wallet regardless of tax changes in 2026.

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Federal tax bracket changes could leave you with a larger paycheck

Your tax bracket helps determine which percentage of your paycheck goes to federal taxes. However, inflation can cause your income to rise faster than the tax code can change to accommodate you, which means you could end up in a bracket that taxes you too much relative to what you can actually afford.

To prevent this type of "bracket creep," the IRS is raising the earnings thresholds for all tax brackets starting in the 2026 tax year (which applies to the taxes you file in 2027). Hopefully, this means you'll have a lower payroll tax deduction moving forward.

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The standard deduction is going up, which lowers your taxable income

Unless you itemize your taxes, you probably take the standard deduction when you file a tax return. This deduction amount lowers your overall taxable income, which may put you in a lower income tax bracket and help you save money.

In 2026, the standard deduction is set to increase from $15,750 for individuals to $16,100. The standard deduction for married couples will go from $31,500 to $32,200.

Other ways to keep more of your paycheck

Tax changes may help you keep more money in your pocket, but they aren't the only way to ensure your paycheck reaches further in 2026. Follow these tips to start maximizing your earnings and savings while further lowering your tax burden in the new year.

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Contribute to a 401(k)

The standard deduction isn't the only way to lower your overall taxable income. Each year, you're allowed to contribute a certain pre-tax amount to a 401(k) retirement savings account, which ensures you're saving money for the future while lowering your tax burden in the present.

For the 2026 tax year, the 401(k) contribution limit is going up to $24,500.

Take advantage of your employer's match

Since 401(k) plans are employer-sponsored savings plans, many employers will commit to matching a percentage of your contribution up to a certain amount. If you aren't already taking advantage of your employer's program, find out what savings criteria you need to meet to qualify (some businesses require you to contribute a certain dollar amount before they'll begin to match).

Open an HSA

A health savings account (HSA) helps you save money for health care costs while lowering your taxable income. You may contribute a certain amount of pre-tax dollars to an HSA if you have a high-deductible health plan. Then, you can withdraw the money penalty-free to use for qualifying health care expenses.

HSAs also give you the option to invest funds and build compounding interest, and you can usually roll funds over year after year to continue growing the fund.

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Start contributing to an FSA

Like an HSA, a flexible savings account (FSA) lets you contribute a certain amount of pre-tax dollars to a health care-specific spending account. Unlike HSAs, FSAs can't be used to invest funds or generate compounding interest. They're also tied to your employer rather than your health insurance, so they aren't an option for everyone.

Still, if your company does give you the option, it's worth considering whether an FSA could help you save.

Add to an IRA

Individual retirement accounts (IRAs) ensure you can save money for retirement with or without a traditional employer. Depending on your financial situation, you may be able to set up both types of accounts (your financial advisor can tell you more). Just like 401(k) limits, IRA contribution limits are going up this year, from $7,000 to $7,500.

Commit to making catch-up contributions

Once you turn 50, the federal government increases your 401(k) contribution limit so you can give your retirement savings a boost. If you have a 401(k), you can contribute an extra $8,000 in the 2026 tax year. And once you're between the ages of 60 and 63, your catch-up contribution limit increases to $11,250 per year.

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Pick up a part-time job to boost your savings

The best way to increase your paycheck might be to add a second paycheck altogether. Part-time jobs like driving for DoorDash or pet-sitting can give your bottom line a boost, especially if you invest every penny earned into a retirement account.

Take advantage of energy tax rebates

If you're planning to make a major energy update to your home or vehicle this year, check the Department of Energy's list of tax-credit-eligible changes first. Depending on your upgrade, you could qualify for either a tax credit or a rebate that lowers the financial strain of an energy-related improvement.

Get reimbursed for employee expenses

Do you often spend money out of pocket for business-related expenses, including food and travel? Check your company's employee handbook to make sure those purchases are reimbursable, and be proactive about recouping your costs if your employer is slow to pay up.

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Bottom line

You deserve to keep more of what you earn next year, and making a few key changes can help you do just that, regardless of changes to tax codes. Looking for more ways to save? Schedule an appointment with a retirement planner who can help you set retirement goals, determine optimal savings amounts, and work out a beneficial tax strategy.

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