Gross vs Net Pay: Where Your Paycheck Goes

Your salary and your take-home pay are two very different numbers. The gap between them is made up of taxes and deductions — knowing what they are helps you budget from the number that actually reaches you.

From gross to net

• Federal income tax — withheld based on your income and W-4.
• State income tax — varies by state; some have none.
• FICA — 7.65% for Social Security and Medicare (employers pay a matching share).
• Pre-tax deductions — 401(k), HSA, and health premiums, which also lower your taxable income.

Why pre-tax deductions are powerful

Money you route to a traditional 401(k) or HSA isn't taxed now, so contributing reduces both your take-home pay and your tax bill — often by less than the full contribution, because of the tax saved. It's one of the easiest ways to pay yourself first.

See your real take-home pay with the calculators below.