Gross vs. net: what the gap is made of
Gross pay is what your employer agrees to pay. Net (or take-home) pay is what reaches your account after three things come off: income tax, payroll taxes, and voluntary deductions. A $5,000 monthly gross that becomes $3,600 net is normal, not a mistake.
The three buckets that shrink your pay
- Income tax — federal (and, in many places, state and local) income tax, usually withheld progressively as you earn.
- Payroll tax — in the US this is FICA: Social Security plus Medicare, charged at a flat rate on wages up to a cap.
- Deductions — pre-tax items like a 401(k) contribution or health insurance premium, and sometimes post-tax items like a union fee or garnishments.
The simple formula
Net pay ≈ Gross − (Gross × tax rate) − deductions
If you earn $4,000 gross, your combined tax rate is 22%, and you contribute $200 to a 401(k): net ≈ $4,000 − $880 − $200 = $2,920. That is the number your budget should be built around — not the $4,000.
One caveat the calculators hide
A single "tax rate" field is a simplification. Real payroll uses tiered rates: the portion of your income in a higher bracket is taxed more, which is why your effective rate (total tax ÷ total income) is lower than your marginal rate (the rate on your last dollar). Use a combined estimate for planning, but don't mistake it for an exact paystub.
Estimate it privately
Open the Take-Home Pay Calculator, enter your gross pay, your combined tax rate as a percentage, and any deductions — pension, insurance, loan repayments — and the net figure updates live. The whole calculation runs in your browser, so none of your salary details are sent anywhere. If you are modelling a busy week, compute the gross first with the Overtime Pay Calculator and then drop that gross into the take-home tool to see what the overtime actually nets you.
Planning across borders or comparing remote offers in different currencies? The Timezone Converter and Unit Converter help you line up hours and figures consistently.
FAQ
Why is my take-home so much lower than my gross? Because tax and deductions are withheld on every paycheck. A 20–30% gap is typical for a mid-income earner.
Are 401(k) and insurance contributions "lost" money? Pre-tax deductions reduce your taxable income, so they lower your tax bill too — you save toward retirement or cover health costs with money you would otherwise have paid in tax.
Is this the same as my official paystub? No. Use the calculator for planning and ballpark checks; your employer's payroll system applies exact tiered rates, credits, and withholdings.
This article is general information, not tax advice — regional rules and brackets vary.