Salary
Take home pay
Taxes are a percentage of gross; other deductions are usually fixed amounts added on top.
The Formula
net = gross - (gross x total tax rate) - other deductions
Taxes are a percentage of gross; other deductions are usually fixed amounts added on top.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| N | Net pay | currency | Take home pay after all deductions. |
| G | Gross pay | currency | Total pay before deductions. |
| r | Combined tax rate | ratio | Federal, state and payroll rates added together. |
| D | Other deductions | currency | Fixed amounts such as insurance and retirement. |
What Each Symbol Means
Ncurrency
Net pay
Take home pay after all deductions.
Gcurrency
Gross pay
Total pay before deductions.
rratio
Combined tax rate
Federal, state and payroll rates added together.
Dcurrency
Other deductions
Fixed amounts such as insurance and retirement.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate take home pay page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Take Home Pay, filed under Everyday Life. Every number the guide produces comes from substituting into this one line.