Gross pay
Your salary or hourly wage before anything is taken off. Job offers, salary surveys and pay rises are almost always quoted gross. If you're paid by the hour, gross pay is your rate multiplied by the hours you work.
Net pay (take-home pay)
What's left after your employer withholds income tax, social insurance contributions and any deductions you chose, like pension or health insurance. It's the number to use when you budget for rent, bills and savings.
What sits between them
| Country | Compulsory deductions | Common optional deductions |
|---|---|---|
| United States | Federal income tax, Social Security, Medicare, state and local income tax | 401(k), health insurance, HSA |
| Canada | Federal and provincial income tax, CPP, EI | RRSP, union dues, benefits |
| United Kingdom | Income Tax, National Insurance, student loan | Workplace pension |
Real examples (2026)
| Example | Gross | Net | You keep |
|---|---|---|---|
| Illinois | $60,000 | $47,565 | 79% |
| British Columbia | $60,000 | $47,935 | 80% |
| England | £40,000 | £32,320 | 81% |
Most people on average salaries keep between 70% and 85% of their gross pay. The share falls as income rises because income tax is progressive.
How to increase your net pay
- Check your tax withholding form (W-4 in the US, TD1 in Canada) or your UK tax code is right.
- Pre-tax savings like a 401(k), RRSP or salary-sacrifice pension cut your tax, even though your net pay falls by less than you save.
- Claim every credit or allowance you're entitled to, like Marriage Allowance in the UK.
Frequently asked questions
Is salary gross or net?
Salary is almost always quoted gross, meaning before tax. Your payslip shows both gross pay and net pay for each period.
How do I work out my net pay?
Subtract income tax, social insurance (FICA, CPP and EI, or National Insurance) and any other deductions from your gross pay, or use a take-home pay calculator for your country.
Written by Muhammad Raza. Last updated October 14, 2026.