Net pay is the amount of money an employee actually takes home after taxes and other deductions are subtracted from their gross salary. It is the real income a person can spend or save, and the figure that matters most for budgeting.
The difference between these two figures is the most common source of payroll confusion:
| Concept | Definition |
|---|---|
| Gross pay | Total earned before any deductions |
| Net pay | Amount received after taxes and deductions |
Net pay is reached by subtracting the following from gross salary:
The formula is: Net pay = Gross salary - Taxes - Contributions - Other deductions. Each of these lines appears on your pay stub.
Net pay is distributed on a regular schedule, most often bi-weekly or monthly, depending on the company's payroll policy.
Yes. Net pay and take-home pay both mean the amount left after all deductions.
Because taxes, benefit contributions, and other withholdings are subtracted from your gross salary to reach net pay.
Getting paid into a global account can reduce conversion costs, so more of your net pay reaches you.
Ontop is a global payroll and payments platform that lets companies hire and pay teams in 150+ countries and pays each worker into an account they control, so more of net pay stays with the worker.
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