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Net pay is the amount of money an employee takes home after all deductions have been subtracted from their gross pay. This calculator helps verify salary in the USA by calculating net pay from gross pay minus federal tax, state tax, and FICA contributions.
The calculator uses the following formula:
Where:
Explanation: The equation subtracts all mandatory deductions from the gross pay to determine the actual take-home pay.
Details: Understanding net pay is crucial for financial planning, budgeting, and verifying paycheck accuracy. It helps employees know exactly how much they'll receive after all deductions.
Tips: Enter all values in USD. Gross pay should be your annual salary before taxes. Federal tax, state tax, and FICA amounts can typically be found on your pay stub or W-2 form.
Q1: What's the difference between gross pay and net pay?
A: Gross pay is your total earnings before deductions, while net pay is what you actually receive after all taxes and deductions.
Q2: What is FICA?
A: FICA stands for Federal Insurance Contributions Act, which includes Social Security (6.2%) and Medicare (1.45%) taxes.
Q3: Why is my state tax zero?
A: Some states (like Texas, Florida) don't have state income tax. If you live in one of these states, you wouldn't have state tax deductions.
Q4: How often should I check my net pay?
A: It's good practice to verify your net pay each pay period, especially after any changes to your tax withholding or benefits.
Q5: Are there other deductions not included here?
A: Yes, this calculator focuses on core deductions. Other deductions like health insurance, retirement contributions, or wage garnishments would further reduce net pay.