From Gross Salary to Take-Home Pay
Take-home pay, also called net pay, is what’s left of your salary after federal income tax, state income tax (where applicable), Social Security, Medicare, and any other deductions like retirement contributions or health insurance premiums are subtracted. The gap between your gross salary and your take-home pay can be significant, which is why budgeting based on your advertised salary alone often leads to an unrealistic picture of what you actually have to spend.
The main deductions that reduce gross pay typically include:
- Federal income tax, based on your tax bracket and filing status
- State income tax, which varies significantly or doesn’t apply at all depending on your state
- Social Security and Medicare (FICA) taxes
- Pre-tax deductions like 401(k) contributions or health insurance premiums
Our take-home calculator estimates your net pay based on these deductions, and our after-tax take-home calculator breaks the federal and state tax portion down in more detail.