Definition
What actually lands in your account after taxes, insurance premiums, and payroll deductions. Budgets and savings rates should be calculated on net income.
Why it matters
Net income is the real size of your paycheck and the honest base for every budget percentage. Plans built on gross income overcommit money that never arrives.
Example
A $75,000 salary nets about $4,700 a month after taxes, health insurance, and 401(k) contributions. The 50/30/20 split gets applied to the $4,700, not the $6,250 gross.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.