Take-Home Pay
Take-home pay is your net income after all taxes and mandatory deductions. Learn what reduces your gross pay and how to calculate your after-tax income in any country.
What Is Take-Home Pay?
Take-home pay — also called net pay, net income, or after-tax income — is the amount deposited into your bank account after your employer has deducted income tax, social security contributions, and any other mandatory withholdings from your gross salary. It is what you actually have to spend, save, or invest.
Understanding take-home pay is more useful than knowing your gross salary for most financial decisions: budgeting, comparing job offers across different tax jurisdictions, or evaluating whether to relocate.
What Reduces Gross Pay?
The gap between gross pay and take-home pay is made up of several different deductions, which vary by country:
Income Tax
The largest deduction for most workers. Calculated progressively based on taxable income after allowances and deductions. Each country has its own brackets and rates.
Social Security / Payroll Contributions
Almost every major country levies additional mandatory contributions on top of income tax. These fund pensions, healthcare, and unemployment insurance:
- US: FICA (Social Security 6.2% + Medicare 1.45%) on wages, plus an additional 0.9% Medicare for high earners
- UK: National Insurance — 8% between £12,570 and £50,270; 2% above
- Canada: Canada Pension Plan (CPP) and Employment Insurance (EI)
- Australia: Superannuation (technically employer-funded at 11.5%, but many economists treat it as deferred pay)
- India: Employees’ Provident Fund (EPF) — 12% of basic salary for most salaried employees
- Ireland: Pay Related Social Insurance (PRSI) — 4% on most earnings
- New Zealand: KiwiSaver — employee contribution between 3% and 10% (voluntary but default-enrolled)
Other Withholdings
Depending on employer and jurisdiction, you may also see deductions for:
- Private health insurance premiums
- Company pension / 401(k) / retirement plan contributions (pre-tax or post-tax)
- Student loan repayments (UK Plan 2: 9% on income above £27,295; Australia HELP: progressive rates on Repayment Income)
- Salary sacrifice arrangements
Worked Example: UK Employee at £55,000 (2026/27)
| Item | Annual |
|---|---|
| Gross salary | £55,000 |
| Personal allowance | −£12,570 |
| Taxable income | £42,430 |
| Income tax (20% on £37,700) | −£7,540 |
| Income tax (40% on £4,730) | −£1,892 |
| National Insurance (8% on £37,700) | −£3,016 |
| National Insurance (2% on £4,730) | −£95 |
| Take-home pay | £42,457 |
Effective income tax rate: 17.2%. Combined effective rate (tax + NI): 22.8%.
Worked Example: US Single at $80,000 (2026)
| Item | Annual |
|---|---|
| Gross salary | $80,000 |
| Standard deduction | −$14,600 |
| Taxable income | $65,400 |
| Federal income tax | −$9,441 |
| FICA (Social Security 6.2% + Medicare 1.45%) | −$6,120 |
| Federal take-home (before state tax) | $64,439 |
State income tax adds further deductions in most US states — from 0% (Texas, Florida, etc.) to over 10% in California for higher earners.
Country Comparisons at Equivalent Income
Take-home pay at a US$75,000 equivalent gross salary (income tax + primary social contributions, 2026 estimates):
| Country | Approx. take-home |
|---|---|
| Singapore | ~US$63,000 |
| United States | ~US$57,000 |
| Canada | ~US$54,000 |
| Australia | ~US$52,000 |
| United Kingdom | ~US$51,000 |
| Ireland | ~US$50,000 |
| New Zealand | ~US$49,000 |
| India | ~US$59,000 |
| South Africa | ~US$52,000 |
These are illustrative estimates. Actual take-home depends on filing status, deductions, and local/state/provincial taxes. Use the Tax Atlas calculator for precise figures.
Why Gross Salary Comparisons Mislead
Two job offers with identical gross salaries in different countries can result in very different take-home pay. A £60,000 salary in London and a CA$100,000 salary in Toronto have different purchasing power before you even account for cost of living — the tax structures are that different. Always compare offers on a net, after-tax basis.
Similarly, a “pay rise” that tips you into a higher income tax bracket can feel smaller than the nominal figure suggests, but remember: only the income above the threshold faces the new rate — so a raise always increases net pay.
Key Takeaway
Take-home pay is gross salary minus income tax, social contributions, and other withholdings. It is the only number that matters for actual financial planning. Use Tax Atlas to calculate your take-home in any of the nine countries we cover — instantly, with no signup required.
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Choose a countryThis glossary entry is for general educational purposes only and does not constitute tax advice. Tax laws change frequently. Consult a qualified tax professional for advice specific to your situation.