Budgeting and tax
Lesson 4 of 9
Gross and net pay
Objective. Work out take-home pay after deductions.
The key idea
Gross pay is before deductions; net pay is what actually arrives. Subtract tax, national insurance and pension contributions from gross.
Worked example
Gross £2,400 a month with £360 tax, £150 NI and £120 pension.
- 1Total deductions: 360 + 150 + 120 = 630.
- 22400 − 630 = 1770.
Answer: £1,770 net
Practice
Each question comes with a picture and a listen button. Try it first, then reveal the answer.
Common mistake. Budgeting from gross pay rather than net pay.
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