Your job offer says $80,000. Your bank deposit says something a lot smaller. The gap between those two numbers is the difference between gross pay and net pay — and understanding it is the first step to actually budgeting your money.
Gross pay: what you earn
Gross pay is your total compensation before anything is taken out — your salary, or your hourly rate times hours worked, plus any bonuses, commissions, or overtime. It's the headline number on your offer letter and the top line of your pay stub.
Net pay: what you keep
Net pay — your "take-home" — is what's left after every deduction. It's the amount that actually hits your bank account each payday. For most US workers, net pay is roughly 70–85% of gross, depending on your state and deductions.
What comes out in between
- Federal income tax — withheld based on your W-4 and tax bracket.
- State (and sometimes local) income tax — zero in nine states, progressive or flat in the rest.
- FICA taxes — 6.2% Social Security (up to the wage base) and 1.45% Medicare. See what FICA tax is.
- Pre-tax deductions — 401(k), HSA, FSA, and health premiums, which lower your taxable income. See pre-tax vs after-tax deductions.
- After-tax deductions — Roth 401(k), garnishments, or union dues.
An example
Take a $80,000 salary in a state with income tax. After federal tax, state tax, and FICA, a single filer might net somewhere around $60,000 a year — about $5,000 a month instead of the $6,667 the gross figure implies. The exact number depends entirely on your state and deductions, which is what the calculator is for.
See your real net pay
Plug your salary and state into the paycheck calculator to see your exact net pay, or browse a state-by-state calculator to compare. Paid hourly? Convert first with the hourly-to-salary calculator.