Net vs Gross Income Calculator
Understand the difference between your gross income and actual take-home pay. Calculate taxes, deductions, and see exactly where your money goes.
Income Details
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Income Summary
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to see your net vs gross comparison
Income Breakdown
Pay Period Breakdown
Current Pay Period
Annual Summary
Where Your Money Goes
Tax Deductions
Voluntary Deductions
Income Distribution
Income Allocation
Monthly Impact
Understanding Gross vs Net Income
What is Gross Income?
Gross income is your total earnings before any taxes or deductions are taken out. This includes:
- Salary or wages before deductions
- Bonuses and commissions
- Overtime pay
- Tips and other compensation
What is Net Income?
Net income (take-home pay) is what remains after all deductions. Key deductions include:
- Federal and state income taxes
- Social Security and Medicare (FICA)
- Health insurance premiums
- Retirement contributions
Income Calculation FAQs
Why is there such a big difference between gross and net income?
The difference comes from various mandatory deductions (federal/state taxes, Social Security, Medicare) and voluntary deductions (retirement contributions, health insurance). Typically, 25-35% of gross income goes to taxes and deductions.
How can I increase my net income?
You can increase net income by adjusting tax withholdings (via W-4), optimizing retirement contributions, choosing more cost-effective insurance plans, or exploring tax-advantaged accounts like HSAs and FSAs.
Are all deductions bad?
No! Many deductions provide future benefits. Retirement contributions grow tax-deferred, health insurance protects against medical costs, and some deductions may lower your taxable income, reducing your overall tax burden.
How often should I review my income and deductions?
Review your paycheck deductions at least annually, or whenever you experience major life changes (marriage, children, job change, significant salary increase). This helps ensure your withholdings and benefits align with your current situation.
What's the difference between effective tax rate and marginal tax rate?
Your marginal tax rate is the rate on your last dollar of income, while your effective tax rate is the average rate you pay on all your income. The effective rate is typically lower because of progressive tax brackets and deductions.