Calculate take home payTo calculate take home pay, just add all deductions and then subtract the total deductions from the gross pay. Definition of take home pay: Also called net pay, the take home pay is the money that is left after all deductions have been subtracted from the gross pay. Definition of deductions: All money taken away from your gross pay Definition of gross pay: The amount of money paid to an employee before deductions Take home pay = Gross pay  deductions Example #1: Steve is a computer programmer and he works 35 hours a week. Steve gets paid $25 / per hour. Calculate take home pay The following are deductions from Steve's paycheck: Federal tax: $130 State tax : $25 Health insurance: $80 Medicare tax: $52 Disability: $12 Union dues: $21 First, calculate total deductions: Total deductions = Federal tax + State tax + Health insurance + Medicare tax + Disability + Union dues Total deductions = $130 + $25 + $80 + 52 + $12 + $21 Total deductions = $320 Second, calculate steve's gross income: Gross pay = Number of hours worked × rate Here, the rate is how much you get paid per hour Thus, gross pay = $35 × $25 = $875 Take home pay = Gross pay  deductions Take home pay = $875  $320 Take home pay = $555 Example #2: Amy is a nurse and she works 52 hours a week. Amy gets paid $50 / per hour for regular time and $75 / hour for overtime The following are deductions from Amy's paycheck: Federal tax: $150 State tax: $54 City tax: $24 Health insurance: $100 Medicare tax: $45 401k contribution: $80 First, calculate total deductions: Total deductions = Federal tax + State tax + City tax + Health insurance + Medicare tax + 401k contribution Total deductions = $150 + $54 + $24 + $100 + $45 + $80 Total deductions = $453 Second, calculate steve's gross income: Gross pay = Number of hours worked × rate Since Amy worked 52 hours, there is overtime pay. Regular pay = $40 × $50 Regular pay = $2000 Overtime pay = $12 × $75 Overtime pay = $900 Gross pay = Regular pay + Overtime pay Gross pay = $2000 + $900 Gross pay = $2900 Take home pay = Gross pay  deductions Take home pay = $2900  $453 Take home pay = $2447 




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