The Gross pay refers to the Remuneration before statutory deductions. In addition to the agreed basic wage, it can include things like certain allowances, bonuses, premiums or other components of remuneration.
Which components belong to the Gross pay in a specific case and how they are treated for tax or social security purposes depends on the respective type of remuneration.
Depending on Employment relationship, examples of Gross pay may include:
The Gross wage refers to the Remuneration before statutory deductions. The Net wage is generally calculated after deducting Wage tax and the employee's share of contributions to the Social security.
The actual payout amount may differ from Net pay if further deductions, offsets or additional payments are taken into account.
The Gross pay is to be distinguished from the assessment bases for tax and Social security.
Gross taxable income and gross social security earnings therefore do not necessarily have to be identical to the total Gross pay.
The Gross pay is a key output variable of Payroll. The statutory deductions are calculated on the basis of the respective tax and social security assessment values.
Related terms
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