Conducting salary research is essential when exploring careers. Use the information in this free lesson to start exploring salaries.

### Calculating your net income

Now you know how to calculate your gross income per pay period. However, your **net income**, the amount of money you actually get in your paycheck, will be less than your gross income, since income tax and any contribution you make to your insurance or retirement will be taken out. Here we'll show you how to calculate your **annual net income** and **your net income per pay period**.

How much money you pay in income tax depends on a number of factors, including what **company** you work for and what **state** you live in. Therefore, how much tax is withheld will vary from person to person.

#### Net Annual Income

When calculating net income, you'll start with your **annual gross income**, since the government uses annual salaries to determine how much income tax you should pay. Let's say that you earn **$12,000 a year**. We'll assume that a total of **$900** of that will be withheld for taxes during the year. To find out how much your **net income** will be per year, we'll **subtract** the amount of income tax you'll pay from your gross annual income.

**$12,000 - $900 = $11,100 net annual income**

#### Net Income Per Pay Period (all workers)

To find out how much your net income is per pay period if you're paid **biweekly**, we'll **divide** your annual net income of **$11,100** by **26**.

**$11,100 ÷ 26 = $426.92 net biweekly income**

To find out how much your net income is per pay period if you're paid **semi-monthly**, we'll just **divide **your annual net income by** 24**.

**$11,100 ÷ 24 = $462.50 net semi-monthly income **

Note that when taxes are withheld from your paycheck, **deductions**, or factors that allow you to pay less in taxes, are not taken into account. If your deductions are **more than** the amount that was withheld from your pay, you will get a **tax refund** when you file your taxes.