Net Wages Definition

Net wages are the amount an employee receives once gross wages have been reduced by deductions and taxes.

Net Wages Extended Definition

Also known as “net pay,” “net income,” or “take-home pay,” an employee’s net wages are what they bring home after subtracting taxes and other deductions from their gross income.

Taxes and deductions include:

  • Federal, state, and local income tax
  • Medicare and Social Security taxes
  • Health and dental insurance premiums
  • Retirement contributions
  • Contributions to flexible spending accounts

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How to Calculate Net Pay for Payroll

Last Updated By

Rachel Blakely-Gray | Apr 28, 2023

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