Gross Pay vs Net Paycheck
**Gross pay** is before taxes and deductions. **Net pay** is what hits your bank—federal, state, FICA, health insurance, and 401(k) contributions shrink the gap, often 25-35% on middle incomes.
Step by step
1. Annualize gross
Convert offer to yearly gross before comparing roles.
2. Estimate withholding
Use tax calculator with filing status and state.
3. Add benefits value
Employer HSA and match are not in net pay but matter.
Gross vs net
Budget on net; negotiate on gross plus benefits.
- Gross: Headline offer number; basis for loans sometimes.
- Net: Actual cash flow; use for rent and savings goals.
Use our calculators
Common mistakes
- Comparing gross offers across different states
- Ignoring bonus tax withholding
FAQ
Why is first paycheck smaller?
Benefits elections and withholding tables can front-load deductions.