Salary net and gross - what are these values?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

When looking for a job and going through interviews, especially if this is your first employment experience, you will certainly be faced with the need to negotiate wages (and this is often one of the main criteria for choosing a place). At the same time, two concepts will appear in the conversation (or the description of the vacancy posted on the job site) - net and gross. What it is? What is the difference between two identical amounts with different prefixes? The difference between them is significant, and in this article we will discuss what it is.

Let's start with the translation of these terms. In English there are concepts net and gross. What are these definitions? The first is translated as "pure", the second - "full" or "general". How to decipher this in relation to the future payment of your work? Very simple. Net salary is the amount after taxes, that is, the money that you will receive directly in your hands or oncard. As you probably know, an employee is required to pay a monthly tax of 13% on his income. It is called income tax or personal income tax. As a rule, you don’t have to do this personally, since the organization transfers this amount for the employee, and pays the rest (minus 13%) as wages. Gross - what is this value? And this is precisely the base from which personal income tax is withheld, that is, the amount before tax. It is she who is indicated in the employment contract, but in fact does not go completely into your pocket.

It is very important to understand the difference between these values and compare what gross/net salary is offered in the organizations you are considering for employment. So, one company may offer you a lower wage, another - a little more. But upon a detailed acquaintance with the conditions of both, it turns out that the first one reported the net salary, the other - gross. What does this mean? And the fact that after deducting taxes in the second case, wages there will be the same or even lower (depending on the specific amounts and the difference between them). That is why you should always pay attention to these prefixes.

Let's take a simple example. Organization "A" offered you an amount equal to 85 thousand rubles, and "B" - 5 thousand more (that is, 90 thousand). At the same time, in the first case, it is said about the value of net, in the second - gross. Now let's turn to simple arithmetic. In order to find out the actual salary in the company "B", you should subtract from it the amountincome tax:

90000 – 900000, 13=78300.

Thus, being seduced by the difference of 5 thousand rubles and not knowing what gross means, you will lose 6, 7 thousand.

Of course, if the difference is not too significant (and in any other case), you should pay attention to other factors. If we talk about material benefits, then these can be various bonuses (monthly, quarterly), the presence of the 13th salary, bonuses for the implementation of the plan and other "additional incentives" in monetary terms. In addition, many companies offer their employees a number of privileges, discounts and other useful "lures". This includes medical insurance, and the opportunity to visit the fitness center, swimming pool, language and other courses, etc. for free.

It is equally important to understand what kind of atmosphere reigns in the company, in particular in your future team, are there events for employees, are there career opportunities and how transparent they are.

In general, before deciding where exactly to get a job, you should evaluate working conditions from all sides. And do not forget the main thing about salary (whether net or gross) - that it is one of the key factors of choice, but far from the only one.