How is Take-Home Pay Defined?

Take-home pay is the amount of cash that an employee is paid after all payroll taxes and other deductions are removed from the person’s gross pay. This residual amount of cash is what an employee has available for spending or investment purposes. The deductions that can be taken from gross pay to arrive at take-home pay include (but are not limited to) the following:

• Federal income tax
• State and local income taxes
• Social Security tax
• Medicare tax
• Health insurance deductions
• Flexible spending account deductions
• Pension deductions
• Repayment of company loans or advances
• Charitable donation deductions
• Garnishments

Source:AccountingTools