Gross income is your total pay before deductions, your full salary or hourly pay. Net income is your take-home pay after taxes and deductions. That means federal and state tax, FICA, and your health plan and 401(k). In short: gross is what you earn, net is what you keep.
Below, we explain gross vs net income and gross income vs net income with real paycheck examples for you. You also get a free calculator and answers to your top questions. If you are comparing net vs gross income on your job offer, you may also be reading gross pay vs net pay on your pay stub.
Source: IRS Publication 15-T. SSA 2026 wage base. State revenue departments. See our methodology for how we calculate examples.
| Gross Income | Net Income | |
|---|---|---|
| Definition | Total earnings before deductions | Take-home pay after deductions |
| Also called | Gross pay | Net pay, take-home pay |
| Includes | Full salary/wages, before tax | What's deposited to your bank |
| Deducts | Nothing | Taxes, FICA, benefits, 401(k) |
| Used for | Loans, salary offers | Budgeting, spending |
Enter your salary, state, and filing status to see gross pay, every withholding line, and your estimated net take-home pay.
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Worked dollar examples
Example (monthly): A $3,000 gross monthly paycheck ($36,000/year, single, Texas) with about $409 in withholdings (federal tax, FICA) leaves about $2,591 net.
Example (annual): A $60,000 gross salary in a no-income-tax state nets about $50,381 after federal tax and FICA; in a high-tax state like California, closer to $48,039.
| Gross salary | Total deductions | Net annual | You keep |
|---|---|---|---|
| $40,000 | $5,690 | $34,311 | 85.8% |
| $60,000 | $9,620 | $50,381 | 84.0% |
| $75,000 | $13,610 | $61,391 | 81.9% |
| $100,000 | $21,022 | $78,978 | 79.0% |
Examples use PaycheckSense 2026 federal withholding (single, Texas, standard deduction, no pre-tax deductions). See how to calculate take-home pay for the full formula.
Gross vs net on your paycheck
On your pay stub, gross pay is your top line with your full pay for that period. Net pay is your bottom line sent to your bank after taxes and benefits. Your $75,000 job offer does not mean $75,000 in your bank, and the gap shows where your money goes.
Four things turn your gross into net. You pay federal tax, FICA, and state tax, and you may also pay items like your 401(k) and health plan. Pre-tax benefits lower your taxable pay, but post-tax cuts do not. See our pay stub abbreviations guide and FICA explained guide for line codes and the 7.65% payroll tax.
Gross vs net for a business
On your paycheck, gross and net refer to your wages, but for a business the labels shift. Gross income (or gross profit) is revenue minus the cost of goods sold. Net income is profit after all costs, interest, and taxes.
If you are self-employed, your 1099 gross is your business revenue. Your personal take-home still follows federal, state, and FICA rules like W-2 pay. See our self-employed tax guide for your quarterly estimates and deductions.
Is gross income monthly or yearly?
Your gross income can be monthly or yearly for your situation. Job offers and loan apps quote your annual gross ($60,000 per year). Your pay stubs show your per-period gross each cycle. Multiply your hourly rate by 2,080 for annual gross, then divide your salary by your pay periods.
Example: $23.50/hour × 2,080 hours = $48,880 gross per year. Browse our hourly and salary conversion pages for more rates, including $23 an hour and $25 an hour.
What gets taken out
Four types of deductions reduce your gross pay to your net pay. Each one shows you where your money goes. Some of those lines you can control.
Real example: $75,000 salary explained
Here is your biweekly Texas paycheck as a single filer earning $75,000 per year. You have no pre-tax deductions, and Texas charges you no state income tax on that pay.
Gross vs net by salary level
These figures show your take-home as a single Texas filer with standard deductions, no pre-tax cuts, and biweekly pay.
| Gross | Deductions | Net (TX) | You keep |
|---|---|---|---|
| $40,000 | $5,690 | $34,311 | 85.8% |
| $60,000 | $9,620 | $50,381 | 84.0% |
| $75,000 | $13,610 | $61,391 | 81.9% |
| $100,000 | $21,022 | $78,978 | 79.0% |
How state taxes shrink your net pay
This example holds your $75,000 salary and your federal tax and FICA constant while only your state changes.
At $75,000, California workers keep about $3,628 less per year than Texas residents because of state income tax. Use our California paycheck calculator or Texas paycheck calculator for state-specific net pay.
The mortgage trap
Banks qualify you on gross income, but you make payments from net income. At $75,000 gross in Texas, monthly net is about $5,116. A lender's 28% front-end ratio on gross ($1,750/month) can exceed 30% of your actual take-home. Always budget housing costs against net pay, not your offer letter.
Increase net pay without a raise
Update your W-4 when your life changes with new dependents or a second job. Maximize your pre-tax deductions like your 401(k) and health plan. Pick a lower-tax state when remote work lets you move. See our pre-tax vs post-tax deductions guide and W-4 guide for your next steps.
Frequently asked questions
Is net income before or after taxes?
What does $3,000 net mean?
What is my gross income if I make $23.50 an hour?
Is $50,000 net income good?
How do I calculate net income from gross?
What is the difference between gross pay and net pay?
Sources & methodology
Tax figures verified against IRS and SSA sources for 2026. State rates from each state Department of Revenue. Educational only - not tax or financial advice.
- IRS Revenue Procedure 2025-32 - 2026 Tax Brackets irs.gov/pub/irs-drop/rp-25-32.pdf
- IRS Publication 15-T (2026) - Federal Income Tax Withholding Methods irs.gov/publications/p15t
- IRS Topic No. 751 - Social Security and Medicare Withholding Rates (2026) irs.gov/taxtopics/tc751
- SSA: 2026 Social Security Wage Base - $184,500 ssa.gov/oact/cola/cbb.html
- State income tax rates: Georgia DOR (4.99% HB 463); California FTB (1%-13.3%); New York DTF (4%-10.9%); Texas Comptroller (0%); all other states' respective revenue departments.