Take-Home Paycheck Calculator
Results
Gross Pay (per period)
Total Deductions
Total Taxes
Take-Home Pay (per period)
What is Take-Home Pay?
Take-home pay, also known as net pay, is the amount of income you receive after all deductions have been taken from your gross pay. Gross pay is your total salary before anything is removed. The difference between your gross and net pay is made up of taxes, benefit contributions (like health insurance or retirement plans), and other withholdings. Understanding this difference is key to effective budgeting and financial planning.
How to Calculate Net Salary
Calculating your net salary involves a few key steps:
- Determine Gross Pay: Divide your annual salary by the number of pay periods in a year (e.g., 12 for monthly, 26 for bi-weekly).
- Subtract Pre-Tax Deductions: Subtract contributions to accounts like a 401(k), HSA, or traditional IRA. This lowers your taxable income.
- Calculate and Subtract Taxes: Apply federal, state, Social Security, and Medicare tax rates to your taxable income to find the total tax amount.
- Subtract Post-Tax Deductions: Subtract any deductions taken after taxes, such as Roth IRA contributions or wage garnishments.
- Result is Net Pay: The remaining amount is your take-home pay for that period.
FAQs
What is take-home pay?
Take-home pay, or net pay, is the amount of money you receive in your paycheck after all deductions—such as taxes, retirement contributions, and health insurance premiums—have been subtracted from your gross pay.
How is it different from gross income?
Gross income is your total earnings before any deductions are taken out. Net income (or take-home pay) is the actual amount of money you receive after all deductions, including taxes, benefits, and other contributions, have been withheld.
What deductions reduce net salary?
Common deductions include federal and state income taxes, FICA taxes (Social Security and Medicare), pre-tax contributions to retirement plans (like a 401(k)), health insurance premiums, Health Savings Account (HSA) contributions, and post-tax deductions like Roth IRA contributions.
How can I calculate take-home pay manually?
Start with your gross pay per period, subtract pre-tax deductions to find taxable income, calculate and subtract all applicable taxes, and finally subtract any post-tax deductions. Our calculator automates this process for you.
Why does paycheck vary by state?
Paycheck amounts vary by state primarily due to differences in state and local income tax rates. Some states have high income tax rates, some have low rates, and a few have no state income tax at all, which directly impacts your tax withholding.
How can I increase my take-home pay?
You can potentially increase your take-home pay by adjusting your tax withholdings (updating your W-4), contributing more to pre-tax accounts to lower your taxable income, seeking out tax credits, or reducing optional deductions. The most direct way, however, is to increase your gross salary through a raise or promotion.
