Two Numbers on Every Paycheck
Gross pay is your total earnings before any deductions — the salary or hourly rate you agreed to when you were hired. Net pay, or take-home pay, is what actually lands in your bank account after taxes and other deductions are subtracted. Confusing the two is one of the most common budgeting mistakes, since a mortgage payment calculated against gross income can look far more affordable than it actually is against your real take-home pay.
Between gross and net pay, deductions generally fall into a few categories:
- Mandatory taxes: federal income tax, state income tax where applicable, and FICA
- Pre-tax benefits: retirement contributions, health insurance premiums, HSA/FSA contributions
- Post-tax deductions: things like Roth retirement contributions or wage garnishments
Our take-home calculator shows your estimated net pay from a given gross salary. Once you know your real take-home number, our home affordability calculator gives you a much more accurate picture of what home price actually fits your budget.