Net Pay
Definition
The amount an employee actually receives after all deductions — taxes, social contributions, benefits and other withholdings — are taken from gross pay. Also called take-home pay.
Formula
Net pay = Gross pay − Total deductions
Related Terms in Payroll
Payroll Run
The process of calculating and paying employee wages for a period, including computing gross pay, deductions and net pay, and generating payslips and payment instructions.
Pay Period
The recurring span of time over which employee pay is calculated — weekly, fortnightly, semi-monthly or monthly. It sets the cadence of payroll runs and affects how annual amounts are prorated.
Payslip
A statement given to an employee each pay period detailing gross pay, individual deductions, and net pay, along with year-to-date totals. Many jurisdictions require employers to provide one.
Provident Fund (EPF)
A retirement savings scheme in India where both employee and employer contribute a percentage of basic wages to the Employees' Provident Fund. The accumulated balance, with interest, is paid out on retirement or exit.
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