Gross pay vs net pay explained

Gross pay is what you earn before anything is taken off. Net pay, also called take-home pay, is what reaches your bank account after deductions.

Offers and salary adverts almost always quote gross pay, so the amount you can spend each month is lower.

Typical deductions include income tax, social security or national insurance, pension contributions, health insurance and union fees. Which ones apply, and at what rate, depends on your country and your circumstances.

Some deductions are pre-tax, such as many pension contributions, which lowers the income your tax is calculated on.

Net pay is gross pay minus total deductions. If you earn 5,000 a month and deductions total 1,200, your net pay is 3,800, so deductions take 24% of your gross pay.

Our payroll calculator does this subtraction for you. Use the deduction total from a recent payslip for the most realistic result.

Compare net pay, not just gross pay, and include benefits such as health cover, pension matching, bonus and paid leave. A lower salary with strong benefits can be worth more.

For exact figures, use your tax authority's calculator or ask your employer for a sample payslip.