Net Pay is the amount of money an employee takes home after all deductions have been made from their gross pay. These deductions can include taxes, retirement contributions, health insurance premiums, and other withholdings. Essentially, it represents the actual earnings that an employee receives in their paycheck. Calculating Net Pay involves subtracting all mandatory and voluntary deductions from the Gross Pay. For example, if an employee earns $3,000 in gross pay and has $500 in deductions, their net pay would be $2,500. Understanding net pay is crucial for budgeting and financial planning.