Understanding Your Take-Home Pay
Gross pay is the headline; take-home is what lands in your account. Learn what's deducted between the two and why your paycheck looks smaller.
Try the paycheck calculatorPut these numbers to workOpen →Your salary is quoted as a gross figure, but the amount that actually reaches your bank account — your take-home or net pay — is smaller. The difference is a stack of deductions taken from each paycheck, some mandatory and some chosen by you.
What comes out of gross pay
- •Federal income tax — withheld based on your W-4 and pay rate.
- •State and sometimes local income tax, depending on where you live.
- •FICA — Social Security and Medicare, a fixed percentage of your pay.
- •Pre-tax deductions — 401(k) contributions, health insurance premiums, HSA/FSA.
Pre-tax vs post-tax deductions
Order matters. Pre-tax deductions like a traditional 401(k) come out before income tax is calculated, so they lower your taxable income and soften the tax hit. Post-tax deductions come out after. That's why increasing your 401(k) contribution reduces your paycheck by less than the contribution itself.
Why your withholding may be off
Withholding is an estimate. If too little is withheld you owe at tax time; too much and you get a refund — effectively an interest-free loan to the government. Big life changes (marriage, a new job, a child) are the moments to revisit your W-4 so the estimate stays close.
Budget on net, not gross
Because deductions are substantial, always build your budget around take-home pay. Planning against the gross figure overstates what you can actually spend or save each month.