Gross vs Net Pay: What's the Difference?
If your offer letter says $70,000 but your bank deposits look smaller, you are seeing the gap between gross and net pay. Understanding it helps you budget with the money you actually receive.
Gross pay
Gross pay is your total earnings before anything is taken out — your base salary plus any bonuses, commissions or overtime.
Net pay
Net pay is what remains after deductions: federal and state income tax, FICA, and voluntary items like health insurance premiums and retirement contributions.
| Item | Example on $70,000 |
|---|---|
| Gross pay | $70,000 |
| Federal income tax (est.) | −$7,660 |
| FICA (7.65%) | −$5,355 |
| State tax (est. 5%) | −$3,500 |
| Net pay (est.) | ≈ $53,485 |
Your exact numbers depend on filing status, state and pre-tax deductions. The take-home calculator estimates the full breakdown for your salary.
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Open the calculatorFrequently asked questions
Why is my net pay so much lower than my salary?
Taxes (federal, state and FICA) plus voluntary deductions like retirement and health insurance reduce your gross salary to your net take-home pay.
Is my salary gross or net?
An advertised salary is almost always gross — the amount before taxes and deductions. Your net pay is what actually reaches your bank account.