What is Net Pay?
A net salary is the total amount you receive after deductions are made from your gross amount. These deductions include taxes deducted like professional tax and deductions for (PPF) Public Provident Fund. Generally, the net salary is the amount you take home at the end of each month.
How Net Pay is Calculated?
Calculating a Net Pay is shown below with a simple example:
|(HRA) House Rent Allowance||1,40,000|
|Deduction for (EPF)||21,600|
The net salary is the difference between gross salary and total deductions, that is, 2,46,400.
How to Find Net Pay?
After the payroll subtractions are taken out, an individual employee’s remaining amount, which he takes home, is known as net pay.
Follow the below-mentioned steps to view the net pay:
- Induce the gross pay
- Calculate the taxable income
- Apply the income tax rates
- Complete the net pay
Also, See: Gross Pay