Net vs gross pay: what comes out of your paycheck
Net vs gross pay on one real paycheck: $25 an hour for 80 hours, a 401(k) and health insurance before taxes, then federal tax, Social Security and Medicare.
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Chapters
Key figures
| Gross pay ($25 an hour, 80 hours) | $2,000.00 |
| 401(k), 5% (before taxes) | −$100.00 |
| Health insurance (before taxes) | −$75.00 |
| Pay for federal income tax | $1,825.00 |
| Pay for Social Security and Medicare | $1,925.00 |
| Federal income tax | −$135.15 |
| Social Security tax | −$119.35 |
| Medicare tax | −$27.91 |
| Net pay (Texas) | $1,542.59 |
| Net pay without the two deductions | $1,690.85 |
2026 rules, pay date November 6, 2026, single filer unless stated. Every number comes from the same engine as our calculators. Estimate, not tax advice.
Transcript
This video explains gross pay and net pay. Net pay is also called take-home pay.
Gross pay is your pay before deductions. For example, you earn $25 an hour. You work 80 hours in two weeks.
Your gross pay is $2,000.00.
Some deductions come out before taxes. In this example, 5% goes to a 401(k), $100.00. Health insurance is $75.00.
These deductions decrease your taxable pay. The 401(k) decreases income tax only. Health insurance also decreases Social Security and Medicare taxes.
Then the employer withholds taxes. Federal income tax is $135.15. Social Security tax is $119.35. Medicare tax is $27.91.
Net pay is the pay that you get. In Texas, your net pay is $1,542.59.
Without the two deductions, net pay is $1,690.85. The deductions cost $148.26 of net pay, not $175.00. This is because they decrease your taxes.
Your pay stub shows gross pay, each deduction, and net pay. Examine it on each payday.
To calculate your net pay, go to paycheckcalchq.com.
Official sources
How we made this video
The script is written in ASD-STE100 Simplified Technical English: short sentences, one word for one meaning, and active voice. The voice is synthetic (Piper text-to-speech). The animation is drawn with code from the calculator's own results, so the numbers on screen match the calculator. We remake a video when a rate in it changes.
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