Glossary
Net Income
Net income is your take-home pay after all deductions — federal and state taxes, Social Security, Medicare, health insurance premiums, and retirement contributions. It's the amount actually deposited in your bank account.
Why it matters
Net income is the only number that matters for budgeting because it's what you actually have to spend. Many people budget based on gross income and wonder why they come up short. Understanding the gap between gross and net also reveals optimization opportunities — like adjusting tax withholding or maximizing pre-tax retirement contributions.
Example
On an $85,000 salary, after 22% effective tax rate, 7.65% FICA, and $200/month health insurance, your net income is roughly $4,800/month.
How Ray helps
Ray calculates your net income directly from the deposits hitting your bank account. Run to see your actual net income averaged over recent months, accounting for any variability.
$ ray "what is my monthly take-home pay?"Related terms
Gross Income
Gross income is the total amount you earn before any deductions — taxes, insurance premiums, retirement contributions, and other withholdings.
Tax Bracket
A tax bracket is a range of income taxed at a specific rate in the U.S.
Budget
A budget is a plan for how you'll allocate your income across spending categories, savings, and debt payments over a set period — usually monthly..
Cash Flow
Cash flow is the net amount of money moving in and out of your accounts over a period.
Savings Rate
Your savings rate is the percentage of your income that you save or invest rather than spend.