Take-Home Pay
The net amount received in a paycheck after all taxes and deductions have been withheld from gross wages.
What is Take-Home Pay?
Take-home pay (also called net pay) is gross wages minus all mandatory withholdings — federal income tax, state income tax, Social Security (6.2% up to the wage base), Medicare (1.45%), and any applicable local taxes — as well as voluntary pre-tax deductions such as 401(k) contributions, health insurance premiums, and flexible spending account deposits. For most US employees, take-home pay is 65–80% of gross wages depending on tax filing status and benefit elections. Understanding your take-home pay is the essential first step in building a monthly budget, since it represents the actual cash deposited in your bank account.
Example
An employee earns $5,000 gross per month. Withholdings: federal tax $750, state tax $200, Social Security $310, Medicare $72.50, health insurance $300, 401(k) $250. Take-home pay = $5,000 − $1,882.50 = $3,117.50, which is 62.4% of gross pay.
Source: IRS — Tax Withholding Estimator