Gross Pay vs Net Pay
Understand the difference between gross wages and take-home (net) pay, and what typically sits between them on a U.S. pay stub.
Gross pay
Gross pay is total earnings before taxes and most deductions — regular wages, overtime, bonuses, commissions, and other taxable earnings for the period.
Net pay
Net pay (take-home pay) is what remains after subtracting employee taxes and deductions from gross pay for that period.
What sits between gross and net
- Federal income tax withholding
- Social Security and Medicare (FICA)
- State and local income taxes (where applicable)
- Pre-tax benefits (for example certain retirement or health premiums)
- Post-tax deductions (for example garnishments or Roth contributions, depending on setup)
Simple formula
Net pay ≈ Gross pay − employee taxes − employee deductions
Employer-paid taxes (such as the employer share of FICA) are usually not subtracted from the employee's net pay, though they still matter for total labor cost.
Frequently asked questions
Why is my net pay lower than last period with the same hours?
Extra withholding, bonuses taxed differently, benefit elections, missed pre-tax deductions, or YTD Social Security wage-base effects can change net pay.
Do bonuses count as gross pay?
Yes. Bonuses are generally included in gross wages and may use supplemental withholding methods for federal tax.
Sources
See also our full sources list, methodology, and editorial standards. This page is educational and not tax, legal, or accounting advice.
Put the numbers on a real stub
Preview federal, FICA, and state amounts with your own pay details.