Gross Income − Deductions = Take-Home Pay
Gross income is your total earnings before any deductions. Net income (take-home pay) is what remains after taxes, insurance, retirement contributions, and other deductions. For most US workers, take-home pay is roughly 65–80% of gross income, depending on tax bracket, state of residence, and benefit selections.
Federal Income Tax: Progressive tax brackets from 10% to 37%. State Tax: Varies from 0% (Texas, Florida) to 13.3% (California). Social Security: 6.2% on income up to $160,200 (2023). Medicare: 1.45% plus 0.9% additional tax on income over $200K. 401(k): Tax-advantaged retirement — contribute up to $22,500/year (2023 limit).