Employee salary: $50,000 a year. But you know that’s not what they’re walking away with. Between taxes and benefit deductions, the employee’s take-home pay could be far from the $50,000 sticker price (cue the sad violin). To find their take-home pay, you need to know how to calculate net pay.

After all, you want to run an accurate and legal payroll to avoid penalties and fees, and part of that requires you to know the gross to net calculation. Read on for the following: 

1. The difference between gross pay vs. net pay
2. How to calculate net pay
3. Gross to net example