Total earnings for the pay period before payroll taxes and other deductions are subtracted.
PAYCHECK BASICS
Gross Pay vs Net Pay
Gross pay is what you earn before payroll deductions. Net pay is what remains after taxes, benefits, and other deductions are taken out — the amount commonly called take-home pay.
QUICK COMPARISON
Gross pay and net pay at a glance
The amount remaining after deductions — usually the amount deposited into your bank account.
| Question | Gross Pay | Net Pay |
|---|---|---|
| Before or after deductions? | Before | After |
| Also called | Gross wages / gross earnings | Take-home pay |
| Includes taxes already removed? | No | Yes, payroll withholding has been deducted |
| Useful for | Comparing headline wages and salary | Budgeting actual paycheck cash |
PAYCHECK FLOW
How gross pay becomes net pay
Gross Pay
Total earnings
Total earnings
−
Deductions
Taxes, benefits & other withholding
Taxes, benefits & other withholding
=
Net Pay
Take-home pay
Take-home pay
Net Pay = Gross Pay − Total Payroll Deductions
The exact path from gross to net can be more detailed because some deductions may be taken before certain taxes and others after taxes. Your pay stub shows the actual earnings, taxes, and deductions used by your employer.
GROSS PAY
What is gross pay?
Gross pay is the total amount you earn before payroll deductions are removed. For an hourly employee, gross pay can include regular wages, overtime, bonuses, commissions, tips, or other earnings that apply to the pay period.
Hourly Gross Pay = Hourly Rate × Hours Worked + Other Earnings
For a salaried employee, the gross amount for one paycheck is commonly based on annual salary divided by the number of pay periods, plus any additional earnings that apply.
Want to calculate earnings before deductions? Use the Gross Pay Calculator.
NET PAY
What is net pay?
Net pay is the amount left after payroll deductions are subtracted from gross pay. It is commonly called take-home pay because it is the amount the employee actually receives.
Your net pay can change even when your gross pay stays the same. Changes to tax withholding, insurance, retirement contributions, or other deductions can change the amount that reaches your bank account.
COMMON DEDUCTIONS
What can reduce gross pay to net pay?
| Deduction category | Examples |
|---|---|
| Income tax withholding | Federal income tax and, where applicable, state or local withholding |
| Payroll taxes | Social Security and Medicare taxes |
| Health & insurance benefits | Medical, dental, vision, life, or other benefit premiums |
| Retirement contributions | Employee retirement-plan contributions |
| Other deductions | Other voluntary or required payroll deductions that apply to the employee |
The deductions that apply vary by employee, employer, location, benefits, tax elections, and other circumstances.
EXAMPLE
Gross pay vs net pay example
Suppose an employee has $2,500 in gross pay for a pay period. If the paycheck has $650 in total taxes, benefits, and other deductions:
$2,500 Gross Pay − $650 Deductions = $1,850 Net Pay
The employee earned $2,500 before deductions but receives $1,850 after those deductions. The $650 difference is not one single tax — it represents the combined deductions in this example.
SIMPLE ESTIMATOR
Estimate net pay from known deductions
If you already know your paycheck deductions, enter them below to see the gross-to-net calculation.
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This is not a tax calculator. It only subtracts deduction amounts you enter.
IMPORTANT DISTINCTION
Gross pay is not the same as taxable income
Gross pay, taxable wages, taxable income, and net pay are related but they are not always the same number. Certain payroll deductions can affect taxable wages, while income-tax calculations can involve additional rules outside the paycheck itself.
For everyday paycheck reading, the simplest distinction is:
Gross = earned before deductions | Net = received after deductions
WHEN EACH NUMBER MATTERS
Should you look at gross pay or net pay?
Use gross pay when comparing salary offers, hourly rates, or total earnings before deductions.
Use net pay when planning rent, bills, savings, and other spending because net pay is closer to the cash actually available from the paycheck.
A job offer may advertise gross salary, while your household budget usually needs the expected net paycheck.
FAQ
Gross pay vs net pay FAQ
What is the difference between gross pay and net pay?
Gross pay is earnings before payroll deductions. Net pay is the amount remaining after taxes, benefits, and other payroll deductions are taken out.
Is net pay the same as take-home pay?
Yes. Net pay is commonly called take-home pay because it is the amount an employee receives after payroll deductions.
Is gross pay before or after taxes?
Gross pay is before payroll taxes and deductions are subtracted.
Why is my net pay lower than my gross pay?
Net pay is lower because payroll taxes, benefit contributions, and other applicable deductions are subtracted from gross pay.
Can two people with the same gross salary have different net pay?
Yes. Net pay can differ because tax withholding, benefits, retirement contributions, and other deductions can vary between employees.
How do I calculate gross pay?
For hourly work, a basic gross-pay calculation starts with hourly rate multiplied by hours worked, then adds applicable overtime and other earnings. Numviro's Gross Pay Calculator can help with that calculation.
Does the estimator on this page calculate taxes for me?
No. The estimator only subtracts the tax and deduction amounts you enter. It does not calculate federal, state, local, or other tax liability.