Take-home pay explained

Gross is the market number; net is what you bank

Almost every salary page, job post, and labour-market survey quotes gross pay — the figure before income tax and most mandatory deductions. That is the right number for comparing markets and negotiating base salary, because employers and statistical agencies speak in gross.

Take-home (net) is what hits your account after tax. Two offers with the same gross can diverge widely once you change country, filing status, or whether social contributions are deducted from pay. Use gross to place yourself in the market; use net to judge whether the lifestyle works.

On Pay by Role, city and country salary figures are gross annual estimates in local currency unless a tool explicitly says otherwise. When you switch display currency, we convert the gross amount — we do not silently switch to a net figure.

What our tax models include

The take-home estimator applies a simplified national income-tax model for the country you select. For several major markets we use published bracket schedules (for example US federal single-filer bands, UK income-tax bands for England/Wales/NI, Canadian federal bands, Australian resident bands). Elsewhere we use a flat or generic effective-rate estimate so the calculator still returns a directional net.

Each result includes a short note describing the model. Read that note before you treat the net figure as planning-grade. The effective rate shown is tax divided by the gross you entered — useful for comparing scenarios, not a personalised tax filing.

You can reach the same estimator from salary pages (via the interactive calculator), from the dedicated tax / take-home tool, and from annual or hourly converters that estimate net after they expand a period into annual gross.

What the models deliberately exclude

Most models exclude sub-national taxes and payroll social charges: US state tax and FICA, UK National Insurance, Canadian provincial tax and CPP/EI, Australia’s Medicare levy, German solidarity surcharge and social contributions, and similar levies elsewhere. Credits, deductions, and non-standard filing statuses are also out of scope.

That means our net figures usually run higher than a full payroll calculation for the same gross — sometimes by a lot in high-contribution systems. Treat the gap as a reminder to verify with a local payroll tool or accountant when the decision is large (relocation, contracting vs employment, dual-country work).

Bonuses, equity vesting, overtime, and benefits-in-kind are not taxed inside the calculator unless you fold them into the gross you type. If your package is heavily variable, estimate a conservative cash year (base + realistic bonus) rather than a best-case total rewards slide.

How to use the site calculator well

Start from the gross on the salary page or offer letter. Enter it in the country’s local currency context the tool expects, then read annual net and the implied effective rate. If you think in monthly budgets, divide net by twelve — but remember real payroll often withholds unevenly across bonus months.

When comparing two countries, run the same gross lifestyle question twice: once at each country’s median (or offer), then compare nets — not grosses. Pair that with the cost-of-living calculator so you are not mistaking a high net in an expensive city for discretionary income.

For hourly or contractor quotes, convert to annual at a realistic billable or working-hour assumption (we use 2,080 hours for full-time salaried conversions). Contractors often need a higher gross to match employee net after self-employment tax, unpaid leave, and benefits they buy themselves.

When to go beyond the estimator

Use a fuller tax tool or professional advice when you have significant itemised deductions, equity events, multi-state or multi-country residency, or household filing complexity. Our models are educational market context, not filings.

If an offer is close to your walk-away number on gross but looks tight after a realistic tax and rent check, renegotiate on cash or benefits before you accept. It is easier to fix compensation at offer time than after your first payslip.