Gross vs net salary

What is Gross vs net salary?

Gross salary is an employee's full pay before any deductions; net salary (take-home pay) is what they actually receive after income tax and social contributions are subtracted.

The gap between the two varies a lot by country - tax bands, social security rates, and mandatory contributions differ across the EU, so the same gross salary produces a different net figure depending on where the employee is taxed. That is one reason payroll is run per country rather than by one universal formula.

HR records typically store gross salary, since that is the contractual figure that changes with a raise; net pay is calculated by payroll for each pay run based on current tax rules, not stored as a fixed number. HREvio keeps compensation history at the gross figure and leaves the gross-to-net calculation to a payroll provider.

Related terms

• Payroll
• Compensation history and effective dating
• Payslip (pay stub)

See also

• HREvio vs Deel