📖 Overview
Use this tool to build a practical budget based on take-home income.
⚙️ How It Works
This estimates post-tax pay by applying a tax percentage to gross monthly income.
The Formula
Net Pay = Gross Income × (1 − Tax Rate ÷ 100)
| Net Pay | Estimated take-home pay after tax |
| Gross | Monthly income before any deductions |
| Tax Rate | Effective (average) tax rate as a percentage |
💡Use your effective (average) tax rate, not your marginal rate. Effective rate = total tax paid ÷ gross income. It is usually significantly lower than the top bracket.
Quick Reference
| Gross / mo | 20% tax | 25% tax | 30% tax | 35% tax |
|---|---|---|---|---|
| $3,000 | $2,400 | $2,250 | $2,100 | $1,950 |
| $5,000 | $4,000 | $3,750 | $3,500 | $3,250 |
| $8,000 | $6,400 | $6,000 | $5,600 | $5,200 |
| $12,000 | $9,600 | $9,000 | $8,400 | $7,800 |
Practical Tips
💡 Use an effective tax rate aligned with your situation.
💡 Revisit this estimate when tax brackets or deductions change.
💡 Plan fixed expenses off net pay, not gross pay.
Frequently Asked Questions
❓ Is this exact take-home pay?
No, it is a simplified estimate.
❓ What about benefits and deductions?
Those are not included unless reflected in your input assumptions.