What is the money paid after all deductions and allotments are paid called?

The correct answer is net income, which refers to the amount of money that remains after all deductions, such as taxes, retirement contributions, and other allotments, have been taken from your gross income. In a military context, understanding net income is crucial because it represents the actual take-home pay that service members receive and can use for their living expenses, savings, and discretionary spending.

This concept is fundamental as it helps service members manage their finances effectively by knowing the precise amount available for budgeting and financial planning after mandatory deductions. While gross income represents the total earnings before any deductions, net income provides a clearer picture of one’s financial standing.

In contrast, disposable income typically refers to the amount of money available for spending and saving after income taxes are deducted, which does not account for other deductions that might affect take-home pay. Taxable income is the portion of income that is subject to taxes and does not represent the money actually received. Understanding these terms is important for effective financial management and planning within the military.