What is Take-Home Pay?
Take-home pay is the pay that actually makes it home, once any deductions to your pay have been assessed. This may also be called net pay, and a yearly analysis of your pay may be referred to as net income for the year. It’s an important concept to understand because determining your ability to afford certain expenses should be personally based on take-home and not gross pay. In the US, you will typically see certain deductions taken from your total paycheck. These can include deductions for state, federal and city taxes, deductions for disability pay and for social security, money paid to invest in your 401k, and health insurance payments — when your company offers insurance. Other deductions may include money paid to health savings programs, and money paid for child support, alimony or back taxes. These will all reduce your total take-home pay. Credit card companies and mortgage companies or rental agencies typically assess your income by gross pay. If you’re looking to rent an apart
