Final answer:
Take-home pay is your gross income minus both required and optional deductions. It represents the amount you actually receive in your paycheck after all withholdings. The correct answer is option A.
Step-by-step explanation:
Take-home pay is the amount of money you have left after all deductions have been taken from your gross income. The correct answer to the question "Take-home pay is equal to _____" is A) gross income − (required deductions + optional deductions).
When calculating take-home pay, you start with your gross income, which is the total amount you earn before any deductions. Required deductions often include federal and state taxes, Social Security, and Medicare, which are mandatory withholdings. Optional deductions can include retirement plan contributions, health insurance, union dues, and other benefits you may choose to have withheld from your paycheck. After subtracting both required and optional deductions from your gross income, the result is your take-home pay.