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Terms and Definitions

What is take-home pay?

Updated: May 16, 2024

Take-home pay definition and meaning

Take-home pay is the income which remains from an employee’s salary or wages after all payroll taxes, deductions, and garnishments are deducted. Take-home pay is also referred to as net pay or net salary. the amount received after tax, insurance and other deductions have been removed from an employee’s gross monthly salary. It is also known as net pay or net salary.


More about take-home pay and definition

Take-home pay is net pay. The Current Tax Payment Act of 1943 requires US employers to withhold and remit their employees’ income taxes on their behalf. This generally means that an employee’s paycheck will be for a lower amount than their gross salary for the pay period.


Deductions employers are required to make include federal income tax, as well state and local income taxes, contributions to FICA (Social Security and Medicare), contributions toward premiums for medical or dental insurance, and 401(k) retirement contributions.

Using take-home pay in a sentence

“After taxes, my take-home pay is about fifty-two thousand a year.”

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