How do you calculate net pay?

Net pay equals gross pay minus all deductions: federal and state income tax, Social Security and Medicare (or self-employment tax), and any other deductions like insurance or retirement. The result is your take-home pay.

What's the difference between gross pay and net pay?

Gross pay is your total earnings before any deductions. Net pay is what remains after taxes and other deductions — the amount that actually reaches your bank account.

How do the self-employed calculate net pay?

Start with gross earnings, subtract self-employment tax (15.3%), then subtract estimated federal and state income tax. The remainder is your net pay. Many self-employed people set aside 25-30% of gross for taxes.

Is net pay the same as take-home pay?

Yes. Net pay and take-home pay mean the same thing: the amount left after all taxes and deductions.

How to Calculate Your Net (Take-Home) Pay

Gross pay looks great on paper — net pay is what actually lands in your account. Here's the simple formula, a worked example, and how it differs when you're self-employed.

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The Formula

Net Pay = Gross Pay − Taxes − Other Deductions

Gross pay is your total earnings before anything is taken out. Net pay(or take-home pay) is what's left after deductions.

For Employees (W-2)

Deductions usually include:

Federal income tax (based on your W-4 and bracket)
State income tax (varies; some states have none)
Social Security (6.2%) and Medicare (1.45%)
Optional: health insurance, 401(k), HSA

Example

Gross pay (biweekly)	$3,000
Federal income tax	−$330
State income tax	−$120
Social Security (6.2%)	−$186
Medicare (1.45%)	−$43.50
Net pay	$2,320.50

For the Self-Employed

No employer withholds for you, so the calculation accounts for what you set aside:

Net Pay = Gross − Self-Employment Tax (15.3%) − Estimated Income Tax

Self-employment tax covers Social Security and Medicare; income tax depends on your bracket and state. A common shortcut is reserving 25–30% of gross for taxes. For the details, see our guide on self-employment tax.

Let a Pay Stub Do It

Rather than run the numbers by hand, the StubFast generator calculates taxes and net pay automatically based on your gross, pay frequency, and state — and produces a clean pay stub you can use for income verification.

Estimates vs. reality. Tax figures here are illustrative; your actual amounts depend on your full situation. Any pay stub you create should reflect income you actually earned, and is for documenting genuine income only.

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A pay stub with taxes and net pay done for you. Free preview, clean PDF from $6.99.

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