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Work Out Take Home Pay

How do you calculate take home pay? Figure out the take-home pay by subtracting all the calculated deductions from the gross pay, or using this formula: Net pay = Gross pay – Deductions (FICA tax; federal, state and local taxes; and health insurance premiums).

What percentage of my pay should I take home? The 50-30-20 Rule: Needs, Wants and Savings Spend half of your take-home income on things you need, like housing, transportation and food. Reserve another 30 percent for things you want — trips, clothes and entertainment. Use the remaining 20 percent to pay down debt or to sock away into savings and retirement funds.

What is an example of take home pay? While take-home pay is net pay after taxes and other deductions, gross pay is the total income an individual earns before taxes and deductions. For example, you make $20 per hour and work 80 hours per pay period. Your gross pay is $1,600 ($20 x 80 hours). To get take-home pay, you must subtract taxes and deductions.