Take-home pay

What It Means

Take-home pay is the money that actually reaches you from a paycheck once taxes and other deductions come out. The Consumer Financial Protection Bureau (CFPB) also calls it net incomeNet incomeWhat's left after everything is taken out: on a paycheck, pay after taxes and deductions; for a business, profit after all expenses and taxes. See more, and pay stubs usually label it net pay. Between gross payGross incomeThe full amount you earn before taxes and other deductions come out. For federal taxes, it's all income you receive unless a law exempts it. See more and take-home pay sit federal, state and local income tax, Social Security and Medicare taxes, and anything you've chosen to have taken out, such as retirement contributions or health insuranceHealth insuranceA plan you pay a premium for that covers part of your medical costs, while you pay your own share through a deductible, copays and coinsurance. See more premiumsInsurance premiumThe amount you pay to keep an insurance plan, such as health insurance, in force, usually monthly, quarterly or yearly, whether or not you use any care. See more.

How It Sounds at Home

• "After taxes I bring home about $1,800 every two weeks."
• "The raise barely changed my take-home."
• "What's your take-home, not your salary?"

The Breakdown

Worked example. One paycheck every two weeks, with made-up numbers:

That's about 72% of gross pay. Over 26 paychecks, $1,788.75 comes to $46,507.50 a year reaching the bank account, against $65,000 in gross pay.

What moves the number

• A new Form W-4W-4 formThe IRS form you give your employer so it knows how much federal income tax to withhold from each paycheck, officially the Employee's Withholding Certificate. See more, which changes how much federal income tax is withheld.
• Signing up for, or changing, retirement contributions and insurance through work.
• A raise, a bonus or overtime, which raises gross pay and the taxes on it.
• Moving to a state or city with a different income tax.

Good to Know

For 2026, IRS Topic 751 puts the employee's Social Security tax at 6.2% of wages up to a wage base of $184,500, and Medicare tax at 1.45% of all wages with no limit. Employers also withhold a 0.9% Additional Medicare Tax on any wages above $200,000 in a calendar year. The wage base changes each year, so recheck it when a new tax year starts. According to the CFPB, the Form W-4 you fill out when you start a job decides how much tax comes out of each paycheck. If something on your stub looks wrong, ask your payroll department first, and talk to a tax professional before changing your withholding.

Related Terms and Categories

• Gross income

  The full amount you earn before taxes and other deductions come out. For federal taxes, it's all income you receive unless a law exempts it.

• Net income

  What's left after everything is taken out: on a paycheck, pay after taxes and deductions; for a business, profit after all expenses and taxes.

• Pay frequency

  How often an employer pays you, usually weekly, every two weeks, twice a month or monthly, which sets how many paychecks you get in a year.

• Direct deposit

  A payment, such as a paycheck or government benefit, sent electronically straight into your bank or credit union account instead of as a paper check.

• 50/30/20 rule

  A budgeting guideline that splits after-tax income into 50% for needs, 30% for wants and 20% for savings and paying down debt.

• Paycheck budgeting

  Planning money one paycheck at a time, so each bill is paid from the paycheck that arrives before it's due and the rest is spending money.

Household money and budgeting