Gross salary = your total pay before any taxes or deductions.

Net pay (take-home) = what hits your bank account after taxes and deductions.

Job offers almost always quote gross.

The math

Gross → Net deductions:

  • Federal income tax (~12-37% depending on bracket)
  • State income tax (0-13% depending on state)
  • Social Security (6.2%)
  • Medicare (1.45%)
  • 401(k) contributions (your choice, pre-tax)
  • Health insurance premiums
  • Other deductions (FSA, HSA, etc.)

Rough estimate: Net = Gross × 0.7 to 0.75 (varies by state and personal situation).

Examples

Gross Annual Net Estimate (~70%) Net Monthly Estimate
$50,000 $35,000 $2,917
$75,000 $52,500 $4,375
$100,000 $70,000 $5,833
$150,000 $105,000 $8,750
$200,000 $140,000 $11,667

These are rough. Your actual net depends on state, filing status, deductions, and elections.

Gross salary vs total compensation

Gross salary is usually base pay only. Total compensation includes:

  • Base salary
  • Annual bonus
  • Equity / RSU / stock options
  • Sign-on bonus
  • Health insurance value
  • 401(k) match
  • Other perks

For tech and finance roles, total comp can be 20-50% higher than base salary.

Why job offers quote gross

  • Standardization. Every employer can quote a gross number; net depends on personal circumstances.
  • Tax differences. Federal/state taxes differ; benefits elections differ.
  • Easy comparison. $X vs $Y in gross is comparable; in net it's apples to oranges.

When net matters more than gross

  • Comparing offers across states. State tax differences can shift the ranking.
  • Budget planning. Your rent and bills come out of net, not gross.
  • Real-life affordability. A $100K gross job in CA might be similar take-home to a $90K gross job in TX.

Use a take-home calculator (smartasset.com, paycheckcity.com) for accurate state-specific net.

How to think about your offer

When negotiating, anchor on gross, that's the lever. When budgeting, think in net.

The bigger pattern

Gross salary is one number on the offer letter. The full picture is total compensation + benefits + cost of living + take-home math.

Sorce auto-applies to 5M+ open jobs, 40 free swipes a day. More offers, more comparisons, better understanding of your market value.

For more: how to calculate hourly rate from salary, how to negotiate salary, what salary is middle class.