Gross Pay vs Net Pay
Gross pay is what you earned, net pay is what actually reaches you after taxes.
The idea
Gross pay is everything you earned before anything is taken out, like your hours times your hourly rate. Net pay, sometimes called take-home pay, is what is left after deductions and it is the number that reaches your bank account. Employers are required to withhold taxes from most paychecks and send that money in for you, which is why the two numbers never match. Your payslip lists each subtraction by name, so you can always trace gross pay down to net pay and check that it adds up. 🧾
Words to know
- Gross pay
- All the money you earned before anything is taken out.
- Net pay
- The money that actually reaches you after everything is taken out.
- Withholding
- Tax money your employer takes out of your pay and sends to the government for you.
- Deduction
- Any amount subtracted from your pay, like taxes or health insurance.
- FICA
- The Social Security and Medicare taxes taken out of most paychecks.
Try it — no account needed
Some money comes out of your paycheck automatically, before it ever reaches you. Other money you choose to spend after payday.
Sort each one.
0 / 6 sorted
In the full lesson
- 1Sort into groups
- 2Put it in order
- 3Make the call
Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.
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