Finance glossary
Take-Home Pay
Definition
What actually lands in your account after every deduction from your salary.
Take-home pay, sometimes called net pay, is gross earnings minus income tax, payroll taxes, retirement contributions, health premiums and anything else withheld at source. It is the only figure a household budget can honestly be built on. Raising a pre-tax retirement contribution lowers it while raising total savings, which is why the two numbers often move in opposite directions.
In a sentence
Her take-home pay fell slightly when she raised her retirement contribution, even though her salary had not changed.
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