Total income after taxes, deductions, and expenses—your "take-home" amount.
Net income is your total income after all taxes, deductions, and expenses are subtracted—the amount you actually take home. For employees, this is your paycheck after federal and state income taxes, Social Security, Medicare, health insurance, and 401(k) contributions. For self-employed people, net income is revenue minus business expenses and self-employment taxes. Net income (also called "take-home pay") is what you budget with and use to pay personal expenses. Understanding the difference between gross income (before taxes) and net income is important: lenders primarily care about net income when assessing your ability to pay debts. Calculating net income is the first step in budgeting and financial planning.