Understanding Your Paycheck: Gross Pay vs. Net Pay Explained

Gross pay is the number in your offer letter. Net pay — sometimes called take-home pay — is what actually lands in your bank account. The gap between the two often surprises people, especially early in their career.

What's Typically Deducted

• Federal income tax — based on a progressive bracket system and your W-4 elections.
• State income tax — varies enormously by state; some states (like Texas, Florida, and Washington) have none at all.
• FICA taxes — Social Security (6.2%) and Medicare (1.45%), a flat percentage regardless of state.
• Pre-tax deductions — health insurance premiums, 401(k)/retirement contributions, and HSA/FSA contributions, which reduce your taxable income.
• Post-tax deductions — items like Roth 401(k) contributions or wage garnishments, deducted after taxes are calculated.

Why Two People With the Same Salary Take Home Different Amounts

State of residence is the biggest factor — someone in California or New York will generally see meaningfully more withheld than someone in Texas or Florida at the same salary. Filing status, pre-tax retirement contributions, and health plan elections also shift the number significantly.

Our calculator applies a simplified effective rate (a flat federal estimate plus your state's rate) so you can quickly compare take-home pay across states or before and after a raise — try switching the state selector to see the difference for your specific situation, or check one of our state-specific salary calculator pages.

A Quick Way to Estimate Your Own Take-Home Rate

1. Enter your hourly or annual pay into the calculator.
2. Select your state to apply an estimated state tax rate.
3. Compare the 'per hour' and 'per day' figures before and after taxes to see your real effective rate.