economy

definition of gross salary

Salary is a concept of very high diffusion in our language since it refers to the remuneration that a person receives as consideration for the work they do.

Usually receives it at the end of the month or the beginning of the same and it is thanks to this sum of money that the person can support himself, satisfy his basic needs and those of his family, and in the cases that it is possible because the amount allows it, it is You can give yourself some luxuries and buy things that you like or make you enjoy, such as a next-generation cell phone or a trip abroad.

Money received by the worker after deductions are deducted from him or additional are applied

Gross Salary is he total money that a worker receives for the work he performs before the corresponding withholdings and contributions are made to him that are practiced in each payroll.

While, Net salary will be called salary received by the worker after carrying out the aforementioned deductions and contributions, that is, it is the money that the worker will actually receive in hand or that will be deposited in his account, therefore, the gross salary will always be greater than the net salary.

When a worker arranges a contract with a company and for it a certain salary, the gross salary is the starting money with which he will have and it will be based on that amount that the withholdings will be made and the net salary will be deducted.

Specify the deductions and additional items on the pay stubs so that the worker understands them

The discounts as well as the additional ones of a salary must be contained and exposed in a concrete and understandable way in the salary receipt that is extended to the worker, so that of course, they can understand it simply.

These withholdings may vary depending on the country in question, although we can say that generally these include the payments that correspond to social work, retirement contributions and the withholdings that are made for income or gains tax, that the latter case does. it will be variable according to the nation in question.

Then, in the aforementioned remove they are counted on the one hand IRPF withholdings that correspond to income tax on individuals and then the quota that will be allocated to social security.

To Personal income tax The Tax Agency will be in charge of deducting it from the payroll in anticipation of the taxes that the worker will have to pay later and with regard to the social security quota that is discounted, it will depend directly on the contractual situation of the worker and the type of work you do.

The contribution is divided between the company and the worker and the percentage that both will have to pay is established in the general state budgets in force for that year.

For example, a gross salary of 5,000 pesos, after the aforementioned deductions and contributions, can become a salary in hand or an account of $ 4,100 (net salary).

This distinction between net salary and gross salary is essential to be taken into account and fully understood by workers to avoid misunderstandings that in the future complicate someone's economic situation when it comes time to collect their salary and it does not turn out to be the one that was agreed because it suffered the aforementioned discounts. Mastering and understanding this question will undoubtedly help in negotiating or re-negotiating a contract.

On the other hand, we have mentioned the additional ones, which are the amount that is added to the salary for various conditions and that causes the base salary to increase.

Among these we can mention the realization of overtime, vacation pay, Christmas bonus, per diem, premium for productivity or for presenteeism, among others.

In short, the gross salary will contain the amount without deductions, due to the aforementioned circumstances, plus those additional ones, if applicable.

After it is processed in the corresponding settlement of the month, the corresponding weights for taxes and contributions, among others, will be removed and the corresponding additional ones will be added, and from that sum the salary that the worker will receive that month will result.