Differences Between Gross & Net Pay

Since we’re officially in tax season, we thought it would be a good time to cover some of the basics. One of the more common, basic questions is the differences between Gross & Net Pay.

Gross Pay

Gross pay is a term used to describe your total earned salary before any taxes and other withholdings are deducted from your paycheck.

Net Pay

Net pay is the income that an employee receives after all possible deductions have been made. This represents the actual total amount of money they can use. It’s also commonly referred to as “take-home pay”.

To make things easier, here’s a simple graphic for both individuals and how the term applies to businesses.

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