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What is take-home pay?

💰 Money · updated 4 weeks ago · 2 min read
What is take-home pay?
Short answerTake-home pay is the money left after taxes and deductions are taken out of your paycheck.

Take-home pay is the amount of money you actually receive after taxes and other deductions come out of your paycheck. It is also called net pay.

It matters more than your gross salary when you are trying to budget, because bills are paid with the money that lands in your account, not the headline number on your offer letter.

If you want a real budget, start with take-home pay and work backward from there.

Sources

Consumer Financial Protection Bureau - How to read a pay stub
IRS - Payroll Taxes and Federal Income Tax Withholding

This is general information, not professional financial advice. For decisions about your situation, talk to a qualified professional.

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