- Take-Home Pay
The money that an individual actually receives from working after employment taxes and the cost of benefits and retirement contributions are subtracted. Take-home pay is calculated by taking an individual’s monthly gross income and subtracting federal income tax, Social Security and Medicare taxes, any state or local income taxes, monthly health and dental insurance premiums, 401(k) contribution and contributions to a flexible spending account. The money that remains is what an employee actually has available for expenses like paying the mortgage, buying groceries and paying for discretionary purchases.
Because of all these payroll deductions, an individual’s take home pay (or net pay) often differs significantly from their gross pay. When considering a salary offer for a job, raise or promotion, individuals should look at what their take home-pay, not their gross pay, will be. Similarly, when an employer extends a job offer, pay raise or promotion, he must consider that his true cost of having that employee is not just the employee’s nominal salary, but also the matching portion of Social Security and Medicare taxes; contributions to the employee’s health insurance premiums, retirement plan and any other benefits; pay for vacation days, sick days and personal days; and the employee’s share of operating expenses (such as office space, equipment, utilities and parking).
Investment dictionary. Academic. 2012.
Look at other dictionaries:
take-home pay — ➔ pay1 * * * take home pay UK US noun [U] ( also take home, also take home income) ► HR, WORKPLACE the amount of money that you earn each month after tax, etc. has been taken away: »Non mortgage debt payments shouldn t exceed 10 to 15% of m … Financial and business terms
take-home pay — take home ,pay noun uncount the amount of pay that you receive after taxes and other amounts have been taken away … Usage of the words and phrases in modern English
take-home pay — ► NOUN ▪ the pay received by an employee after the deduction of tax and insurance … English terms dictionary
take-home pay — take home .pay n [U] the amount of money that you receive from your job after taxes etc have been taken out … Dictionary of contemporary English
take-home pay — take′ home pay n. the amount of salary less deductions … From formal English to slang
take-home pay — ☆ take home pay [tāk′hōm΄ ] n. wages or salary after deductions for income tax, social security, etc. have been made … English World dictionary
take-home pay — noun what is left of your pay after deductions for taxes and dues and insurance etc • Hypernyms: ↑wage, ↑pay, ↑earnings, ↑remuneration, ↑salary * * * noun also take home ˈ ̷ ̷ˌ ̷ ̷ … Useful english dictionary
take-home pay — N UNCOUNT Your take home pay is the amount of your wages or salary that is left after income tax and other payments have been subtracted. He was earning ₤215 a week before tax: take home pay, ₤170. Syn: net pay Ant: gross pay … English dictionary
take-home pay — / teɪk həυm ˌpeɪ/ noun pay received, after tax, etc., has been deducted ● After all the deductions, his take home pay is only £300 a week … Dictionary of banking and finance
take-home pay — noun The net earnings of a salary or wage earner. Their take home pay was half their gross, but fifteen percent was for retirement … Wiktionary