Gross salary is the number on your job offer. Take-home pay (net pay) is what hits your bank account. The difference is made up of mandatory taxes and optional deductions — and understanding each line item helps you optimize your paycheck.
Mandatory Deductions: What You Can't Avoid
- •Federal income tax: based on your bracket (10%–37%), withholding determined by your W-4
- •State income tax: 0% in TX, FL, WA, NV, WY, SD, AK, NH, TN — up to ~13% in CA
- •Social Security: 6.2% on income up to $176,100 (2025 wage base)
- •Medicare: 1.45% on all income; additional 0.9% on income above $200,000
Optional Deductions That Reduce Your Taxable Income
Pre-tax deductions reduce your federal and state taxable income — dollar for dollar. Contributing $1,000/month to a traditional 401k reduces your taxable income by $12,000/year. In the 22% bracket, that's $2,640 in federal tax savings annually.
- •401k or 403b contributions (up to $23,500 in 2025)
- •Traditional IRA contributions (up to $7,000)
- •Health insurance premiums through employer
- •HSA contributions ($4,300 individual, $8,550 family in 2025)
- •FSA contributions (up to $3,300)
- •Dental and vision insurance premiums
Quick Reference: What $60k–$120k Earners Take Home
- •$60,000 gross → ~$47,000–$50,000 net (no state tax state, standard withholding)
- •$75,000 gross → ~$57,000–$60,000 net
- •$90,000 gross → ~$66,000–$70,000 net
- •$100,000 gross → ~$72,000–$76,000 net
- •$120,000 gross → ~$84,000–$89,000 net
The single most powerful lever to increase take-home pay is maximizing pre-tax deductions. Maxing a 401k at the 22% bracket saves $5,170/year in federal tax alone. Your "cost" to save $23,500 is only $18,330 in reduced take-home pay.