2 Questions About Giving from Gross or Net Pay

Dear Jack,

One of the most frequent questions I’ve experienced in the world of biblical giving (the word “giving” used intentionally instead of “tithing”) is whether we should be doing our giving off of our gross or our net pay.  This is a legit question, and one I appreciate because it shows the commitment of the ones asking to be intentional about their stewardship plan.

My response to the question isn’t very cut and dry, to be honest.  It depends on a lot of things.  Most Americans receive their income through a W-2, meaning that they’re paid pretty regularly for their time/services, and the difference between their gross and net pay is going to be pretty close to what their individual tax bracket is, depending on the amount of deductions they can claim for any given year.  Small business owners have a more difficult time with this, as do individuals who receive large amounts of interest from investments.  And I’m not going to spend time talking about all the relative factors that would play out in these scenarios.  Instead, I’ll get to the main issue at hand.

The idea of gross/net income is actually relatively new, as payroll withholding taxes were only introduced in the last 100 years or so, a long time after the idea of giving (and, dare I mention, “tithing”) began.

What I’ve found more valuable than a standard response is answering the question with some more clarifying questions, such as these:

  1. Are you saving from your gross or net pay?  What I mean by saving is any money going towards a short or long term goal (retirement, college, car replacement, etc.)  Many people save money into their company-sponsored 401k or 403b plans – and this money is saved “pre-tax” from their paychecks.  This means your final paycheck amount made payable to you is already a net figure.  The ratio of how much we’re saving versus how much we’re giving is a key indicator of if we’re investing in earthly or heavenly treasures.  And to get a good idea of what this ratio looks like, we need an apples-to-apples comparison of our saving and giving.
  2. Are you trying to find the minimum amount “required” to give?  This is the big question.  As much as I appreciate people being intentional about giving plans, a potential flag is raised in my mind about their true intentions when asking if they should be giving from gross or net pay.  If we’re looking to find ways that lower our “required” giving, our heart isn’t in the right place, and this is serious cause for concern.  Evaluate your heart before you go any further – and if you find that you’re truly just looking to find ways to minimize your giving amounts, then I’d strongly encourage you to read and think about 2 Corinthians 9:7 (“…each one should give as he has decided in his own heart, not reluctantly or under compulsion, for God loves a cheerful giver.”).  I wouldn’t be concerned right now as much about the giving amount as I would be about finding out what is right in your own heart, and then being joy-filled in giving that portion, not feeling compelled to.
I think the reason these questions are so valuable in answering the gross/net pay issue is that they’re personalized to you.  It’s not a cookie-cutter answer.  Personally, we give off of gross – because our monthly budget is set up on gross pay.  I build the pre-tax withholdings (local tax, federal tax, FICA, health insurance, all the good stuff) into our spending plan for the month, and have a separate column showing the percentage of my gross pay that each category (including taxes) consumes.  This way I can have an apple to apple comparison of my savings percentage, tax percentage, giving percentage, entertainment percentage, housing percentage, and so forth.


The key, as you can see, Jack, is evaluating your heart.  I’m under the firm conviction that God is less concerned about how much we’re giving than He is about the condition of our heart (this is true of things way beyond finances).  Evaluate your own heart, and then the question of giving from gross or net pay should become evident.  Till next time, Jack,

4 thoughts on “2 Questions About Giving from Gross or Net Pay”

  1. You’re absolutely right that the condition of your heart is number 1. Just thinking through what you wrote about tithing on gross, will this still apply when you’re retired and living off of 401k distributions? In that case, you’re tithing on some of the same money twice. If so then props to you! 🙂

    1. Haha, excellent point … and yes. In a similar line of thought, if Social Security is around by then, Uncle Sam will be double dipping on that as well :).

  2. Good point. I tend to give from net and ask God to prompt me for any opportunities. My question is, how do you give to an individual who needs it without creating dependency and also changing the relationship? Giving anonymously through my pastor, maybe?

    1. That’s a thoughtful question, Cindy. My friend Christ Horst gives some good insight at his blog in giving in general – http://smorgasblurb.wordpress.com/. I wish I could pluck a specific post and link to it, but it may be better just to explore around his site.

      As far as changing the relationship from giving … I think it’s all going to depend on the situation. Anonymously may be good. I think it will mostly depend upon your heart and the depth of the relationship of the recipient. We do a fair amount of family counsel when it comes to giving to family members through estate planning, and you really have to analyze each family relationship differently. You don’t want to undermine their sense of provision, or diminish the need for hard work, or else they could fall into a dependency mentality.

      My advice would be to give anonymously if you can – an envelope of cash left secretly or shipped with certified mail. Or even a cashier’s check slipped under a door.

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