Take Home Pay salary computation made easier than expected
Take-home pay is the actual remaining salary after deductions from all taxes, benefits, and other additional contributions from your paycheck. It is the differential after deducting all gross income-related expenses. Taxes include
- Federal tax, state tax
- municipal tax
- expenses related to medical
are all deductible. What the employee receives is known as take-home pay or net pay.
A take-home pay calculator is used to find the in-hand salary after all deductions.
Are Take home pay calculator and Gross pay calculator the same?
Take home pay calculator, and Gross pay calculator are two different calculators used for two different calculations.
For Eg: An employee working in a fast food chain is paid an hourly wage of $10 an hour, and he works for a pay period of 100 hours with gross pay of $1000. But after deductions, the employee gets $800 as his take-home salary, so his per-hour earning is $8 an hour, which will be his take-home salary.
What is the use of Take home, pay calculator?
The Take-home pay calculator tracks how much you earn and how much your earnings are after all deductions.
As observed from the above example, the take-home pay rate for this employee is much lower than the gross pay rate. When approving loans for significant purchases like cars and real estate, many credit rating and lending organisations take take-home pay into account and not gross pay.
To calculate the take-home pay, one needs to go in for a manual calculation or a calculation carried out in an excel sheet using the formula.
Take Home pay = Gross Salary - Income Tax - all other deductions.
With the Take-home pay calculator, any employee can easily find their take-home pay within a fraction of a second depending on various statuses available, pay frequency, other deductions and state and city income tax rates.