Calculating net income from gross salary, or take-home pay, is a crucial aspect of financial planning and budgeting. Net income refers to the amount of money you receive after taxes and other deductions have been subtracted from your gross salary.
Understanding how to calculate net income is essential for managing your finances effectively. It helps you determine your disposable income, plan for savings and investments, and make informed financial decisions. Historically, the calculation of net income has evolved with changes in tax regulations and the inclusion of various deductions and benefits.