Gross pay is the total amount your employer pays you before any withholding or deductions. Net pay — also called take-home pay — is what you actually receive. For a single employee earning $75,000 a year on a biweekly schedule in 2026, gross is $2,884.62 per paycheck and net is roughly $2,369 — a difference of about $516 per check driven mainly by federal income tax and FICA.
What Makes Up Gross Pay
Gross pay includes:
- Your base salary or hourly wages (including regular and overtime hours)
- Bonuses and commissions paid through payroll
- Shift differentials, hazard pay, and other wage supplements
- Employer-provided taxable fringe benefits (if run through payroll)
It does not include employer contributions to benefits (health insurance, 401(k) match) because those are paid by the employer, not out of your wages.
What Comes Out Between Gross and Net
Deductions fall into two groups:
Pre-tax deductions (reduce taxable income before tax is computed):
- Traditional 401(k) and 403(b) contributions
- Section 125 cafeteria plan: health, dental, vision insurance premiums
- Health FSA and HSA contributions through payroll
Taxes (withheld and sent to government):
- Federal income tax
- Social Security (6.2%, up to the $184,500 wage base in 2026)
- Medicare (1.45% on all wages; an extra 0.9% over $200,000 single)
- State income tax (if your state has one)
- State payroll taxes (disability insurance, paid-leave programs)
Post-tax deductions (after all taxes):
- Roth 401(k) contributions
- After-tax health or life insurance premiums
- Wage garnishments
Worked Example: $75,000 Salary, Single, No State Tax
Using the 2026 federal data (Rev. Proc. 2025-32; SSA 2026 COLA Fact Sheet):
| Line | Annual | Per biweekly paycheck |
|---|---|---|
| Gross pay | $75,000 | $2,884.62 |
| Federal income tax | −$7,670 | −$295.00 |
| Social Security (6.2%) | −$4,650 | −$178.85 |
| Medicare (1.45%) | −$1,088 | −$41.83 |
| Net pay (no state) | $61,593 | $2,368.94 |
Federal tax calculation: $75,000 AGI − $16,100 standard deduction = $58,900 taxable.
- 10% × $12,400 = $1,240
- 12% × $38,000 = $4,560
- 22% × $8,500 = $1,870
- Total: $7,670
The effective federal rate is 10.2% of gross. Add FICA and the combined effective rate is 17.9%.
How Pre-Tax Deductions Change the Gap
A $5,200/yr traditional 401(k) contribution (about 7% of $75,000) lowers the taxes withheld:
| Scenario | Annual net pay |
|---|---|
| No 401(k) | $61,593 |
| 6.9% traditional 401(k) ($5,200/yr) | ~$65,400 (net after 401(k) deduction but tax savings offset the contribution) |
Contributing $5,200 reduces federal income tax by roughly $1,144 (22% × $5,200, the marginal rate on those top dollars). Traditional 401(k) contributions do not reduce FICA wages, so FICA is unchanged. The $5,200 contribution therefore costs about $4,056 of take-home pay — meaningfully less than the full contribution amount.
Gross Pay on Paper vs. Net Pay in Practice
Job offers quote gross pay, but it is net pay that funds your life. When comparing two offers, use the paycheck calculator to run both through the same assumptions — filing status, state, and deductions — so you are comparing the amounts that actually hit your account.
A $5,000 raise may increase net pay by only $2,900–$3,500 depending on your bracket and state. Similarly, moving from a state with a 5% flat income tax to a no-income-tax state effectively gives you more net pay at the same gross.
Key Definitions
| Term | Definition |
|---|---|
| Gross pay | Total wages before any deductions or taxes |
| Net pay | Gross minus all taxes and deductions |
| Taxable wages (W-2 Box 1) | Gross minus pre-tax deductions; used for federal income tax |
| FICA wages (W-2 Box 3/5) | Gross minus Section 125 premiums (most 401(k) plans don’t reduce FICA) |
| Take-home pay | Net pay actually deposited or paid to you |
For a detailed breakdown of your own situation — including state income taxes and payroll deductions — use the paycheck calculator. To understand what each line on your stub means, see how to read a pay stub.