Take-home pay
The money that actually lands in your bank account after taxes, retirement contributions, and other paycheck deductions.
Take-home pay (also called net pay) is your gross salary minus everything withheld before the money hits your account: federal and state income tax, payroll taxes (Social Security and Medicare in the US), health insurance premiums, 401(k) contributions, and any other voluntary deductions.
A $90,000 salary doesn't mean $7,500 a month landing in your bank account. After taxes, insurance, and a 10% 401(k) contribution, it might be closer to $5,200. Budgeting against gross salary is the most common reason budgets fall apart — you can't spend money that's already been spent.
Cashowa always works in take-home unless explicitly told otherwise. If you tell the agent "I make $90k," its first follow-up is "what do you actually take home each month?" because that's the only number that matters for planning.
See also
- Gross vs net income — Gross income is what you earn before deductions; net income is what actually arrives in your bank account.
- Marginal vs effective tax rate — Marginal rate is the rate on your next dollar of income; effective rate is the average rate across all your income.
- Pre-tax vs post-tax contributions — Pre-tax contributions reduce your taxable income now but are taxed at withdrawal. Post-tax (Roth) contributions don't reduce taxes now but are tax-free at withdrawal.
Ask Cashowa about take-home pay
Apply this concept to your actual numbers — with verifiable math.