Net income
GeneralThe amount of money you actually take home after all deductions. This is the number that matters for budgeting because it reflects what you actually have to work with each pay period.
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Gross income
Your total earnings before any deductions like income tax, CPP, or EI premiums are taken off. The number on your job offer is usually gross income; your actual take-home pay (net income) will be lower.
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Deduction
An amount subtracted from your income before tax is calculated, reducing the total tax you owe. Common deductions include RRSP contributions, child care expenses, and union dues.
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Budget
A plan for how you will spend and save your money over a set period, usually a month. A budget helps you see where your money goes and make deliberate choices about priorities.