How to Find My Net Income on My Pay Stub

Your net income is the amount of money you receive after all subtractions from your earnings. This figure, often called “take-home pay,” represents the funds you have available for personal use. Understanding your net income is a fundamental part of managing your finances, as it provides the baseline for creating a budget, tracking spending, and making financial decisions.

Identifying Your Gross Income

Before determining your take-home pay, you must identify your gross income. Gross income is the total amount of money you earn in a pay period before any deductions are taken out. This figure includes your regular wages or salary, and may also encompass other earnings like overtime pay, bonuses, or commissions.

On your pay stub, this amount is easy to locate and is often labeled as “Gross Pay,” “Total Earnings,” or “Gross.” For salaried employees, this number is their annual salary divided by the number of pay periods in a year, while for hourly workers, it is their hourly rate multiplied by the hours worked.

Accounting for Deductions and Withholdings

After locating your gross pay, the next step involves accounting for all the amounts subtracted from it. These subtractions fall into several categories, each serving a different purpose. Your pay stub will list these as deductions and withholdings, which reduce your gross pay to your net pay.

Mandatory Withholdings

Your employer is required by law to withhold certain taxes from your paycheck. These mandatory deductions include federal income tax, and where applicable, state and local income taxes. The amount of income tax withheld is determined by the information you provided on your Form W-4.

Another mandatory withholding is for FICA, which stands for the Federal Insurance Contributions Act. FICA taxes fund Social Security and Medicare. For 2025, the Social Security tax is 6.2% of your gross wages up to an annual limit of $176,100, while the Medicare tax is 1.45% with no wage limit. An additional 0.9% Medicare tax applies to earnings over certain thresholds based on filing status.

Pre-Tax Deductions

Pre-tax deductions are amounts taken from your gross pay before income taxes are calculated. The advantage of these deductions is that they lower your taxable income, which reduces the amount of tax you owe. Common examples include contributions to retirement plans like a 401(k) or 403(b), premiums for health insurance, and contributions to a Health Savings Account (HSA). The specific pre-tax deductions available to you depend on the benefits package offered by your employer.

Post-Tax Deductions

In contrast to pre-tax deductions, post-tax deductions are subtracted from your pay after all mandatory taxes have been calculated and withheld. Because they are taken from your pay after taxes, they do not reduce your taxable income. These deductions are for voluntary contributions or legally required payments. Common post-tax deductions include contributions to a Roth 401(k), union dues, charitable contributions, and court-ordered wage garnishments for child support or unpaid debts.

Calculating Your Net Income

Once you have identified your gross income and all deductions, you can calculate your net income. The formula is to start with your gross income and subtract the sum of all your deductions and withholdings. This can be expressed as: Gross Income – (Total Deductions + Total Withholdings) = Net Income. Total deductions include all pre-tax and post-tax amounts, while total withholdings encompass all mandatory taxes.

For a practical example, an employee has a gross pay of $2,000 for a pay period. Their withholdings include $150 for federal income tax and $153 for FICA taxes. They also have pre-tax deductions of $100 for a 401(k) contribution and $50 for health insurance.

To find their net income, sum all subtractions: $150 (Federal Tax) + $153 (FICA) + $100 (401k) + $50 (Health Insurance) = $453. Then, subtract this total from the gross pay: $2,000 – $453 = $1,547. The employee’s net pay for that period is $1,547.