What term describes the amount of money that an employee takes home after deductions?

The term that describes the amount of money an employee takes home after deductions is known as net income. This figure represents the earnings remaining after all applicable deductions have been subtracted from gross income, including taxes, social security contributions, health insurance premiums, and any other withholdings.

Understanding this concept is important for both individuals managing their finances and businesses handling payroll. Net income provides a clearer picture of actual take-home pay, allowing employees to budget and plan their expenses accordingly. It reflects what an employee can spend or save, making it a key metric in personal financial management.

Other terms listed, such as gross income, refer to total earnings before any deductions, while adjustable gross income and taxable income address specific calculations related to tax liability rather than the actual take-home pay.