Take-home pay is your gross salary minus income tax, payroll taxes and any pre-tax deductions. The formula is the same everywhere — only the tax rules change by country. For 2026: in the US subtract federal income tax + FICA (and state tax); in the UK subtract Income Tax + National Insurance; in Canada subtract federal + provincial tax + CPP/EI.
The 5-step method
- Start with gross pay — your annual salary before any deductions.
- Subtract the tax-free amount — the US standard deduction ($16,100 single in 2026), the UK Personal Allowance (£12,570), or Canada's basic personal amount.
- Apply the tax brackets to the remaining (taxable) income. Each band is taxed only on the income that falls inside it — this is the marginal system.
- Add payroll taxes — US FICA (6.2% Social Security + 1.45% Medicare), UK National Insurance (8% then 2%), or Canada CPP + EI.
- Subtract pre-tax deductions — 401(k), pension, health premiums — and you have take-home pay.
US example — $60,000 single (2026)
- Standard deduction: −$16,100 → taxable $43,900
- Federal income tax (10% / 12% bands): ≈ $5,000
- Social Security 6.2% ($3,720) + Medicare 1.45% ($870): $4,590
- Take-home ≈ $50,400 in a no-income-tax state (less where state tax applies)
Skip the math — the $60,000 after-tax page shows the exact figure for every state, and the US paycheck calculator handles any salary and pay frequency.
UK example — £40,000 (2026/27)
- Personal Allowance −£12,570 → taxable £27,430
- Income Tax 20%: ≈ £5,486
- National Insurance 8%: ≈ £2,194
- Take-home ≈ £32,320 — see £40,000 after tax
Canada example — $60,000 in Ontario (2026)
Federal + Ontario income tax is roughly $11,000–$12,000, before CPP and EI. Use the Canada take-home pay calculator for the exact net including CPP/EI.
Pay-period breakdown
Once you have annual take-home, divide it: ÷12 for monthly, ÷26 for bi-weekly, ÷52 for weekly. Converting an hourly wage instead? See hourly to salary (40 hours × 52 weeks = 2,080 hours a year).
Frequently asked questions
- How do you calculate take-home pay? Gross pay − income tax − payroll tax − pre-tax deductions.
- What is the difference between gross and net pay? Gross is before deductions; net (take-home) is what you actually receive.
- Does take-home pay include 401(k)? No — pre-tax 401(k) contributions are deducted before you receive take-home pay, lowering your taxable income.
General information, not tax advice. Figures are 2026 estimates.