Income
Salary, take-home pay, and income planning.
Income planning starts with the difference between gross pay — the headline salary or hourly rate — and net pay, the amount that reaches your account after federal and state taxes, payroll taxes, and deductions for benefits or retirement contributions.
The guides here explain how take-home pay is calculated, how to convert between hourly and annual figures, how tax withholding works, and how pre-tax deductions change both your paycheck and your taxable income.
The Salary After Tax and Hourly-to-Salary calculators apply these conversions so you can compare offers or plan around a specific paycheck.
Popular Income tools
Common questions
How do I convert an hourly wage to an annual salary?
Multiply the hourly rate by the number of paid hours per week and then by the number of paid weeks per year. A common full-time assumption is 40 hours for 52 weeks, or 2,080 hours, before taxes.
Why is take-home pay lower than my salary?
Take-home pay is reduced by federal income tax withholding, Social Security and Medicare taxes, any state or local income tax, and voluntary deductions such as health insurance premiums and retirement contributions.
What are pre-tax deductions?
Pre-tax deductions, such as traditional 401(k) contributions or certain insurance premiums, are subtracted from pay before income tax is calculated, which lowers current taxable income.
Related topics
Guides for Income are on the way.