Glossary term
Net pay
Take-home pay after all withholdings.
Definition
Net pay — also called take-home pay — is the amount actually deposited into the employee's bank account after all federal, state, and local income tax withholding, FICA (Social Security and Medicare), pre-tax benefit deductions (medical, dental, vision, HSA, FSA, 401(k)), post-tax deductions (Roth 401(k), garnishments, union dues), and any other employer-specific deductions are subtracted from gross pay. The gap between gross and net pay typically ranges from 20% to 35% depending on income, state of residence, and benefit elections.
Example
A $3,000 biweekly gross paycheck might net $2,250 after federal tax, FICA, state tax, and 401(k) and medical deductions.
Related terms
- Pay period — The recurring window of time covered by a single paycheck.
- Pay frequency — How often paychecks are issued.
- Payday — The calendar day wages are deposited.
- In arrears — Wages paid after the pay period ends.
- Biweekly — Every other week — 26 paychecks per year.
- Semimonthly — Twice per month on fixed dates — 24 paychecks per year.
See also
- Pay schedule calculator — convert salary to per-paycheck amount
- Pay frequencies primer — weekly, biweekly, semimonthly, monthly
- Frequently asked questions