Net Wages
The amount of an employee's earnings after all deductions have been subtracted.
Definition
Net wages, often referred to as 'take-home pay,' signify the actual amount of money an employee receives after all mandatory and voluntary deductions have been subtracted from their gross wages. These deductions typically include federal, state, and local income taxes, Social Security and Medicare contributions (FICA), health insurance premiums, retirement plan contributions, and any other authorized withholdings. The Pay Stub Protection Act mandates that employers clearly display the total net wages paid to the employee for each pay period on the pay stub, providing employees with a clear understanding of the final amount they receive after all financial obligations and elections are accounted for.