Your Money Today · 2 min read
Understanding Your Paycheck
Gross vs. net pay, taxes, deductions and benefits: how to read a pay stub and know where your money goes.
Your salary and the money that lands in your account aren't the same. Knowing the difference is step one in budgeting.
Gross vs. net
Gross pay is what you earn before deductions. Net pay, or take-home pay, is what's left after taxes and other deductions.
Common deductions
- Federal income tax, and state or local tax where it applies
- Social Security and Medicare (FICA)
- Health, dental or vision insurance premiums
- Retirement contributions such as a 401(k)
Check every stub
Compare hours and pay rate, and make sure deductions look right. If you get a big refund every year, you may be over-withholding. Adjusting your W-4 can put more in each paycheck. Ask a tax professional if you're unsure.
Budget from your net pay. See budgeting basics.
Updated November 15, 2026. General education only, not financial advice.