One of the biggest mistakes I see people make financially is tithing off their net pay instead of their gross pay.
It’s easy to understand how this can happen. When you get paid and the amount arrives in your checking account, you think, “My paycheck shows I make $2,500 every two weeks. So I’ll tithe $125 a week.” Not so fast.
- Gross income is the total paycheck that you receive from your employer—the total that you earn before taxes and other expenses are taken out.
- Net income is what you take home after taxes and other deductions—after the “net” of deductions comes through. It’s your take-home pay.
So how do you figure out which is which? How do you know if you’re tithing the right amount?
Let’s break it down and go over how to tithe from your paystub. Grab a copy of your most recent paystub or pull it up on your device so you can follow along.
First, find your Earnings section. Depending on your employer, it’s usually the first section. This has a nice breakdown of exactly where your income came from over the pay period.
You may see items listed out such as Regular Pay, Vacation Pay, Disability, Sick Leave, Overtime, and Bonus. These are just a few. Your paycheck may contain others. But all of these combined equate to your total gross income.
There should be a line at the bottom of your Earnings section that says Gross Pay. The Gross Pay amount is likely not the amount was deposited into your bank account—although I’m sure I speak for all of us when I say that I wish it were! This is the amount of money you earned during the pay period before deductions. This amount is what you should be tithing on.
But don’t stop there.
Do you have other income sources in addition to your regular paycheck? Maybe you Uber on the weekends or you get rental income or investment dividends. Don’t forget to add this amount to the Gross Pay from your job and then calculate 10% of the total to get your tithe.
Look at the Deductions section of your pay stub. You might have separate sections labeled Tax Deductions and then Additional Deductions. Examples of deductions can include:
- Federal and State Tax Withholding
- 401k Contributions
- Union Dues
- Health, Vision, and Dental Insurance
- Life Insurance
- Flexible Spending Account contributions
- Accidental Death and Dismemberment
That’s only a few. In the Deductions section, you should have a line that says Net Pay on the bottom. Your Net Pay is your deductions subtracted from your gross income. This amount is what is deposited into your bank account.
You may think you’re tithing 10%, but if you’re tithing on your net income, then it’s probably anywhere from 6% to 8% of your gross income, depending how much your deductions are. Why is this important? Because God says to give him the full tithe, not a partial tithe.
In Malachi, God calls out the Israelites who weren’t tithing when he says, “Will man rob God? Yet you are robbing me. But you say, ‘How have we robbed you?’” and God responds, “In your tithes and contributions . . .. Bring the full tithe into the storehouse, that there may be food in my house” (Malachi 3.8, 10). God asks for the full 10%. He calls us to tithe from our total earnings.
The Tithe: Your First and Best
If you’re tithing from your net pay, are you prioritizing your deductions over God? You don’t pay half of your medical insurance or a percentage of your taxes and expect things to be kosher. But it’s all too easy to tithe on your net pay and assume you’re square with the Lord on your finances.
Tithing on net pay means you’re not giving the full 10%. You’re not giving God the firstfruits of your labor. You’re giving him the leftovers after your health insurance and countless other deductions come out of your paycheck.
I do not want to give God my leftovers. I do not want to give him what’s left in my wallet after my country takes its toll, after my investments are deposited, and after I spend my paycheck on my own needs and desires. Tithing is giving your firstfruits to God, the first and best of what you have. This means God gets paid before anyone else has a claim on my income.
The first and best of my paycheck belongs to the Lord—and to me, that means tithing on gross income every paycheck.
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