The money paid to an employee’s bank account is not their total cost to the company. An employee’s gross income combined with employer expenses impact the total cost of the company, yet only employee withholdings affect take-home pay. Gross income vs. net income Gross income differs from net income, and employee withholdings determine the difference. Employee withholding affects take-home pay by subtracting deductions and benefits from the gross pay, ultimately leading to the net income. Employee withholding refers to the amount of federal income tax withheld (determined by the current tax rate). The total is determined by the amount of money that an employee earns, as well as the information outlined on the W-4 form. Employees must provide their filing status when submitting Form W-4, specifying the number of dependents, working multiple jobs, or other necessary adjustments. Employer expenses Employees add to overall company expenses, including recruitment, training, payroll taxes and processes, and more. Yet while these employer expenses impact the total employee cost to the company, they do not affect take-home pay.