take-home pay

\ ˈtāk-ˌhōm-

Definition of take-home pay

: income remaining from salary or wages after deductions (as for income-tax withholding)

Examples of take-home pay in a Sentence

Recent Examples on the Web After removing these non-holiday gifts, the typical U.S. family spends about 1% of its annual take-home pay on gifts. — Jay L. Zagorsky, The Conversation, "How to pick the ‘right’ amount to spend on holiday gifts – according to an economist," 27 Nov. 2019 According to Krawcheck, 50 percent of take-home pay should go to needs such as rent, gas, food, the mortgage and other must-haves. — Diane Herbst, PEOPLE.com, "Top Money Mistakes Millennials Are Making and What to Do About It, According to a Female CEO," 22 Oct. 2019 Analysts at Bank of America Merrill Lynch estimate the strike has cost GM about $2 billion of earnings, and its striking workers may have each lost $2,000 of profit sharing and as much as $4,000 in take-home pay. — Los Angeles Times, "GM and autoworkers’ deal paves way for vote on ending strike," 16 Oct. 2019 But the problem wasn’t apparent only in teachers’ take-home pay. — Kristina Rizga, The Atlantic, "Teachers Can’t Survive Without Other Teachers," 19 Sep. 2019 For consumers, the tariffs fallout will be big enough to erase the benefits of Trump’s 2017 tax cuts, which boosted many American families’ take-home pay by several hundred dollars last year, according to the Tax Policy Center. — Taylor Telford, Washington Post, "Trump’s trade war comes for consumers: Tariffs could cost U.S. families up to $1,000 a year, JP Morgan forecasts," 20 Aug. 2019 The employee would still be responsible for paying state income tax on their $94,000 in earnings, but would receive a tax credit from the state to make up for it — ultimately bringing them back to the same take-home pay as before. — Vivian Wang And Jesse Mckinley, New York Times, "Saying You Want to Reform the Tax Code? Easy. Doing It? Less So.," 18 Jan. 2018 While $21 an hour is higher than the state’s current $12 minimum wage, drivers must also bear the cost of gas, maintenance and car insurance, which eats into their take-home pay. — NBC News, "Uber, Lyft propose $21 an hour minimum wage for drivers in California," 29 Aug. 2019 The tax cut law passed at the end of 2017 added hundreds of dollars to many middle-class families’ take-home pay last year, according to the Tax Policy Center. — Rachel Siegel, Washington Post, "American consumers are holding up the global economy. But for how long?," 17 Aug. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'take-home pay.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Last Updated

1 Dec 2019

Cite this Entry

“Take-home pay.” The Merriam-Webster.com Dictionary, Merriam-Webster Inc., https://www.merriam-webster.com/dictionary/take-home%20pay. Accessed 11 December 2019.

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More Definitions for take-home pay

take-home pay

noun

Financial Definition of take-home pay

What It Is

Take home pay is the portion of one's salary left after all payroll taxes have been deducted.

How It Works

John Doe has a salary of $100,000. He is paid 26 times per year (every other Friday). The federal and state payroll taxes (Social Security, Medicare, unemployment, and federal withholding) amount to, say, 10% of his salary.

John Doe's salary divided by 26 paychecks equals $3,846.15 per paycheck. However, because John Doe has payroll taxes withheld, his take home pay is actually 90% of that, or $3,461.53.

Why It Matters

Understanding the difference between salary and take home pay is important for anyone trying to create and live on a household budget. Taxes are not the only thing that can affect take home pay. If a person is having alimony, child support, retirement plan contributions, or other money withheld from his or her paycheck, these things will also affect the person's take home pay.

Source: Investing Answers

take-home pay

noun