take home pay is the net amount of income received after the deduction of taxes benefits and voluntary contributions from a paycheck it is the difference resulting from the subtraction of all deductions from gross income deductions include federal state and local income tax social security and medicare contributions retirement account contributions and medical dental and other insurance premiums the net amount or take home pay is what the employee receives 
the basics of take home paythe net pay amount listed on a paycheck is the take home pay paychecks or pay statements report the income attributable to a given pay period pay statements list both earnings and deductions common deductions are income tax federal insurance contributions act fica and medicare tax withholdings there may also be less common deductions such as court ordered child support or alimony and uniform upkeep cost the net pay is the amount remaining after all deductions are taken 1 many paychecks also have cumulative fields that show the year to date earnings withholdings and deduction amounts gross pay is often shown as a line item on a pay statement if it is not shown you may calculate it either by dividing the annual salary by the number of pay periods or by multiplying the hourly wage by the number of hours worked in a pay period for example an employee earning an annual salary of 50 000 which is paid every two weeks will have gross pay of 1 923 08 50 000 26 pay periods per paycheck significance of take home pay vs gross paytake home pay can differ significantly from gross pay as an example an employee paid an hourly wage of 15 hour who works 80 hours per pay period has a gross pay of 1 200 15 x 80 1200 but if after deductions the employee s take home pay is 900 the employee is earning 11 25 hour as a take home rate 900 80 11 25 as seen this employee s take home pay rate differs significantly from the gross pay rate many credit rating and lending agencies will consider take home pay when lending money for large purchases such as vehicles and property 