Net Pay

Net pay is the total take-home money an employee receives after all deductions have been removed, such as Social Security, Medicare, taxes, and insurance deductions.

While this, of course, impacts the employee, it also affects the employer.

Employers often must match contributions withheld from gross pay, meaning that, more often than not, the deductions are higher for an employer to pay than the employee, so the higher the net pay, the less the employer ends up paying in the long term run.

So remember, keep paying your employees well, or else it may be you who ends up paying.