Gross Salary vs Net Salary: How to Calculate Your Take-Home Pay
Gross salary is your pay before deductions; net salary is what reaches your account. Here's the difference, the formula, and how to calculate your take-home.
Your offer letter says one number, your bank account shows another, and the gap between them is the difference between gross and net salary. Knowing how that gap is built is the difference between being surprised by your payslip and understanding exactly where your money goes.
What is gross salary?
Gross salary is your total pay before any deductions. It is the sum of your basic salary plus every allowance: house rent (HRA), medical, conveyance, and any other allowances your employer adds. It is the headline figure quoted in most job offers, but it is not what you take home.
What is net salary?
Net salary, or take-home pay, is what remains after deductions are subtracted from the gross. Typical deductions include income tax, a provident fund (PF) contribution, insurance, and any other withholdings. Net salary is the amount that actually arrives in your account each pay period.
The formula
Gross salary = basic + all allowances
Net salary = gross salary − total deductions
In plain terms: add up everything you earn, add up everything taken out, and subtract the second from the first.
A worked example
- Basic 50,000 + HRA 20,000 + medical 5,000 + conveyance 3,000 = gross 78,000
- Income tax 6,000 + PF 6,000 + insurance 1,500 = total deductions 13,500
- 78,000 − 13,500 = net salary 64,500
Calculate yours instantly
Rather than doing it by hand, the salary calculator takes your allowances and deductions and shows gross, total deductions, and net in one view. To see the employer's side (cost to company) too, use the payroll calculator, and estimate the tax portion with the income tax calculator. Browse the full set on the salary & payroll tools page.
Why your net pay can change
Net pay is not always the same each month. A bonus, overtime, a tax-slab change, or a new deduction all move it. If your role includes overtime, our guide on how to calculate overtime pay shows how that adds on top, and the provident fund guide explains the PF deduction in detail.