How to Calculate Take-Home Pay
What is Take-Home Pay?
A take-home pay calculator computes net pay after all deductions: income tax, National Insurance (UK) or FICA (US), pension contributions, student loan repayments, and any other deductions.
Formula
Take-home = Gross − (federal tax + state tax + FICA + health insurance + retirement + other deductions)
- Gross
- Total earnings ($)
- Deductions
- All taxes and withholdings ($)
- Net
- Take-home pay ($)
Step-by-Step Guide
- 1Net = Gross − Income tax − NI/FICA − Pension − Student loan − Other
- 2UK: auto-enrolment pension minimum 8% total (5% employee + 3% employer)
- 3US: 401k reduces taxable income if traditional; Roth does not
- 4Salary sacrifice: employer schemes can reduce NI as well as income tax
Worked Examples
Input
UK £50,000 gross, 5% pension, Plan 2 student loan
Result
Tax: £7,486; NI: £2,988; Pension: £2,500; Student loan: £2,043; Net: ~£34,983
Frequently Asked Questions
What's included in "take-home" pay?
What you actually receive: gross − all mandatory and elective deductions. After taxes, benefits, retirement.
How can I increase take-home pay?
Increase gross (raises, bonuses). Reduce deductions: adjust W-4, increase pre-tax 401k contributions, find credits/deductions.
What's the difference between take-home and gross?
Gross = all earned money. Take-home = what hits your bank account after withholdings.
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