Calculate take home pay
To 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
A few examples showing how to calculate take home pay
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

May 26, 22 06:50 AM
Learn how to find the area of a rhombus when the lengths of the diagonals are missing.
Read More
Enjoy this page? Please pay it forward. Here's how...
Would you prefer to share this page with others by linking to it?
 Click on the HTML link code below.
 Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.