Net Income Calculator
Gross pay is not what lands in your bank account. Enter your income, tax rates, and deductions to see what you actually take home each year or each month.
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Understanding Net Income
Net income represents the money you actually get to spend or save. The gap between gross and net often surprises people, especially early in their careers. A $75,000 salary might translate to roughly $55,000 in take-home pay once federal taxes, state taxes, and payroll deductions do their work.
This calculator uses flat tax rate percentages rather than progressive brackets to give you a quick, practical estimate. If you want a bracket-by-bracket breakdown, pair this with our tax bracket calculator. For everyday budgeting and financial planning, the flat-rate approach gets you close enough to make informed decisions about spending and saving.
Annual vs. Monthly View
Switching between the annual and monthly views helps you plan at different scales. The annual view is useful for comparing job offers, estimating retirement contributions, or sizing up your overall tax burden. The monthly view is better for building a household budget, checking whether you can afford a rent increase, or planning monthly savings targets.
Keep in mind that some months include extra paychecks if you are paid biweekly (you get 26 paychecks per year, not 24). This calculator divides the annual figure by 12 for the monthly view, which gives you the average. Your actual monthly deposits may vary slightly depending on your pay schedule.
Reducing Your Tax Burden Legally
Pre-tax retirement contributions are one of the simplest ways to lower your taxable income. Every dollar you put into a traditional 401(k) or IRA reduces the income that gets taxed. A $5,000 annual contribution at a 22% tax rate saves you $1,100 in federal taxes while building your retirement fund at the same time.
Health savings accounts work the same way if you have a high-deductible health plan. Other above-the-line deductions like student loan interest and educator expenses also trim taxable income. State-specific credits and deductions vary widely, so check your state's tax authority website for opportunities that apply to your situation.
Frequently Asked Questions
What is the difference between gross and net income?
Gross income is your total earnings before any deductions. Net income is what remains after subtracting taxes, retirement contributions, insurance premiums, and other withholdings.
Should I use my marginal or effective tax rate?
Use your effective tax rate for the most accurate estimate. Your effective rate is the actual percentage of your total income paid in taxes, which is lower than your marginal bracket rate.
What deductions should I include?
Include 401(k) or IRA contributions, health insurance premiums, HSA contributions, union dues, and any other pre-tax payroll deductions. Do not include post-tax expenses like rent.
Does this calculator include FICA taxes?
FICA taxes (Social Security at 6.2% and Medicare at 1.45%) are not automatically included. You can add 7.65% to your federal tax rate or enter the FICA amount as an additional deduction.
How do I find my effective tax rate?
Divide the total federal tax you paid last year (line 24 on Form 1040) by your total taxable income (line 15). Multiply by 100 for the percentage.