1. What is Net Pay Comparison?

This calculator compares hourly and annual net pay (take-home pay after taxes) to help you understand your actual earnings. It's useful for comparing job offers or evaluating your current compensation.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• Annual Salary — Your gross yearly income before taxes
• Hourly Wage — Your gross hourly rate (for reference)
• Hours per Week — Typical work hours (default 40)
• Taxes — Estimated annual tax deductions
• 52 — Number of weeks in a year

Explanation: The calculator shows what you actually take home after taxes, both per hour and per year.

3. Importance of Net Pay Calculation

Details: Understanding your net pay helps with budgeting, comparing job offers, and financial planning. Gross pay doesn't reflect what you actually receive.

4. Using the Calculator

Tips: Enter your annual salary or hourly wage, typical work hours, and estimated taxes. For accurate results, use your actual tax withholding amounts.

5. Frequently Asked Questions (FAQ)

Q1: Why calculate net pay instead of gross?
A: Net pay shows what you actually have available to spend after taxes and deductions.

Q2: How do I estimate my taxes?
A: Use your last pay stub's year-to-date tax deductions or a tax calculator. Include federal, state, and FICA taxes.

Q3: Should I include benefits in this calculation?
A: This calculator focuses on taxable income. Benefits like health insurance would require separate analysis.

Q4: Does this account for overtime?
A: No, this assumes consistent hours. For variable hours, use your average weekly hours.

Q5: How accurate is this for contract work?
A: Contractors should include self-employment taxes (about 15.3% additional) for accurate net pay.