Gross Pay vs Net Pay
Gross pay is what you earn; net pay is what you take home. Here's exactly what happens in between.
- ✓Gross pay. Total earnings before deductions — the figure job offers usually quote.
- ✓Deductions. Taxes and withholdings subtracted from gross pay.
- ✓Net pay. Take-home pay after all deductions.
- ✓Why it matters. Lenders often look at gross income; your budget runs on net pay.
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CO.FILEDEPT.CLOCKVCHR.NO062
bvw2750881968571728172169
COMPANY NAME
(555) 555-5555
COMPANY ADDRESS
CITY, STATE ZIP
Social Security Number:XXX-XX-1234Taxable Marital Status:Single
EarningsRateHoursAmountYear To Date
Regular20.0080.001,600.0020,800.00
Gross Pay1,600.0020,800.00
DeductionStatutory
FICA - Medicare-23.20301.60
FICA - Social Security-99.201,289.60
Federal Tax-108.151,405.95
State Tax-0.000.00
Net Pay$1,369.45
Check-$1,369.45
Net Check$0.00
Earnings Statement
Period Beginning:06/14/2026Period Ending:06/27/2026Pay Date:06/27/2026
EMPLOYEE NAME
(555) 555-5555
EMPLOYEE ADDRESS
CITY, STATE ZIP
Other Benefits
and InformationThis PeriodYear To Date
and InformationThis PeriodYear To Date
Gross pay is your total earnings before anything is withheld — your hourly wage times hours worked, or your salary for the period, plus any overtime, bonuses, or tips.
Net pay is what's left after taxes and deductions come out: federal income tax, Social Security, Medicare, state income tax where it applies, and any benefit or retirement contributions. That net number is what actually hits your bank account.
Frequently asked questions
- Do landlords and lenders use gross or net income?
- Most income requirements (like the 3× rent rule) are based on gross monthly income, though some also consider net.
- Why is the gap between gross and net so large?
- Combined federal, Social Security, Medicare, and state taxes can take a meaningful share of gross pay, along with any benefit deductions.
- Which one is on my pay stub?
- Both — a pay stub shows gross pay, each deduction, and the resulting net pay, for the current period and year-to-date.
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