Net Pay — Payroll Definition
What is Net Pay? Clear definition and explanation for payroll professionals, HR managers, and employees.
What is Net Pay (Take-Home Pay)?
Net pay, also called take-home pay, is the amount deposited into your bank account after all deductions (taxes, insurance, 401k, etc.) are subtracted from your gross pay. On average, American workers take home about 70-80% of their gross pay, depending on their tax bracket, state, and pre-tax deductions. Net pay = Gross Pay − Federal Tax − State Tax − FICA − Benefits − Other Deductions.