Gross vs Net Income: What You Actually Take Home (2026)
Gross income is what you earn on paper. Net income is what actually lands in your bank account. Understanding the difference is essential when estimating real take-home pay.
On this page: What is gross income · What is net income · Real examples · FAQs
What Is Gross Income?
Gross income is your total earnings before any taxes or deductions are applied. This includes salary, hourly wages, bonuses, commissions, freelance income, and other taxable earnings.
What Is Net Income?
Net income is what remains after income tax, payroll taxes, and other deductions are subtracted from your gross income. This is also commonly called take-home pay.
In high-tax states like California, the difference between gross and net income can be especially large. See a real-world breakdown in our California take-home pay guide.
Because taxes vary significantly by location, your net income can change even with the same salary. Your net income is directly affected by your effective tax rate — not just your tax bracket. See how this plays out across the US in our take-home pay by state guide.
Why Gross vs Net Income Matters
Many financial decisions are based on gross income, but your lifestyle is funded by net income.
- Evaluating job offers
- Comparing freelance or hourly rates
- Understanding bonus and severance payouts
- Planning retirement withdrawals
Gross vs net income: real examples by salary and state (2026)
The gap between gross and net income varies significantly by location. Here's exactly how much of a $75,000 and $100,000 salary you actually keep after federal income tax, FICA, and state income tax (single filer, standard deduction, 2026 rates):
| Gross Salary | State | Net Income (Annual) | Net Income (Monthly) | Effective Total Rate |
|---|---|---|---|---|
| $75,000 | Texas (no state tax) | ~$59,500 | ~$4,958 | ~21% |
| $75,000 | Florida (no state tax) | ~$59,500 | ~$4,958 | ~21% |
| $75,000 | New York (upstate) | ~$54,600 | ~$4,550 | ~27% |
| $75,000 | California | ~$54,800 | ~$4,567 | ~27% |
| $100,000 | Texas (no state tax) | ~$76,600 | ~$6,383 | ~23% |
| $100,000 | Florida (no state tax) | ~$76,600 | ~$6,383 | ~23% |
| $100,000 | New York City | ~$65,200 | ~$5,433 | ~35% |
| $100,000 | California | ~$68,900 | ~$5,742 | ~31% |
Estimates only. Single filer, standard deduction, 2026 federal + state rates. NYC row includes NY state + NYC city tax. FICA included in all figures. Use state-specific calculators for your exact take-home: Texas · California · New York · Florida.
What reduces gross income to net income?
The gap between gross and net income comes from three layers of deduction that apply to most U.S. workers:
- Federal income tax — 10–37% progressive brackets. Most $50k–$100k workers fall in the 12–22% bracket. At $75,000 (single filer), federal income tax is approximately $8,900/year.
- FICA (payroll tax) — Social Security (6.2%) + Medicare (1.45%) = 7.65% flat on all wages. On $75,000, that's approximately $5,738/year. This applies in every state.
- State income tax — ranges from 0% (Texas, Florida, Washington) to 13.3% (California top rate). At $75,000 in California, state income tax is approximately $3,600/year. In Texas: $0.
Pre-tax deductions like 401(k) contributions and health insurance premiums reduce your taxable gross income before these rates apply — lowering your total tax bill and increasing your net income further. To understand how your effective rate compares to your bracket rate, see marginal vs effective tax rates.
Calculate Your Net Income
Use these calculators to estimate what you actually keep after taxes:
- Take-Home Pay Calculator Annual salary → net income by state and filing status
- After-Tax Hourly Rate Calculator Convert gross hourly wage to net hourly take-home
- State Take-Home Pay Calculators State-specific net income — federal + state + FICA
For a side-by-side state comparison at your exact salary, use the state take-home pay comparison tool.
Ready to file and see your real net income?
Understanding gross vs net is step one. Filing accurately is step two — these tools calculate your exact net income after every deduction:
- TurboTax — calculates your exact net income and files your return
- FreeTaxUSA — free federal filing, shows your real take-home after all deductions
Affiliate links — we may earn a commission at no cost to you.
Related reading: Before vs. After Taxes · How taxes reduce take-home pay · Effective tax rate explained
Gross vs Net Income FAQs
What is the difference between gross and net income?
Gross income is your total earnings before taxes and deductions. Net income is what you actually take home after income tax, payroll taxes, and other deductions.
Why is my net income much lower than my gross income?
Net income is reduced by income tax, payroll taxes, retirement contributions, and other deductions, which can significantly lower take-home pay.
Does gross income include bonuses and side income?
Yes. Gross income includes salary, hourly wages, bonuses, commissions, freelance income, and most other earned income sources.
Is net income the same as take-home pay?
Yes. Net income and take-home pay generally refer to the same amount — what you actually receive after taxes and deductions.