Salary net and gross: what is it?
When applying for a new job, when the salary is being discussed, the employee hears two new words: net, gross. These are two different amounts of future salary. In fact, it is very important to know the differences between these words, because the size of the salary depends on them. But more often than not, people do not understand the meaning of these important words and ask: "The sum of net and gross: what is it?" Let us take a closer look at each concept in more detail.
Meaning of the word Gross
Gross salary - what is this indicator? What is this number? In English-speaking countries, the word "Gross" means complete, common. If this expression is applied to the employee's salary, then it will be the size of the salary without any deductions. Just this amount is often fixed in the contract between the employer and the new employee. For example, if the sum of 40,000 rubles is recorded in the contract for employment, this is the size of the gross wage. This salary is popularly called “dirty” or “gross”. In Italian, brutto means “bad”, “bad”.
Meaning of the word Net
The word Net has also come to us from English-speaking countries, but this is a reworked version of the word Netto (from Italian). In Russian, it means white, clean.If you use this word in relation to salary worker, it means the amount of money from which all deductions and tax payments have already been taken. This amount is exactly what each employee receives personally. Every month, the income tax is deducted from the salary of each employee, which in turn is subject to various tax rates. But for the majority of the working population, the rate of this type of tax is 13%. Workers who rarely come across taxes and understand little of them can easily become confused. Today, in the hands of employees or on their plastic cards in the bank they charge gross wages. Because in this situation, you need to remember that according to the current legislation, the employer is a tax agent for the state. That is why the calculation of the amount of income tax, the procedure for its payment, and reporting data on it regarding each employee are the obligations of the employer. All of these listed processes are taken into account and have already been completed when the employee receives the gross amount that is recorded in the labor contract. Then this amount is already without the necessary deductions and tax charges.
How to calculate the size of the Net, if you know the amount of Gross
Now, knowing the answer to the question “Net and gross sum: what is it?”, One can, knowing gross, calculate the net. The above example was considered, where the salary of an employee of Gross is equal to 40 thousand rubles. This amount is subject to a tax of 13%. The tax amount in this case will be equal to 40 thousand rubles. * 13/100 = 5.2 thousand rubles. The amount of salary after paying the tax payment will be equal to: 40 thousand rubles. - 5.2 thousand rubles. = 34.8 thousand rubles This amount is the net salary. If you bring these calculations into a general form, then the formula will be as follows: Gross s / n - (Gross s / n * 0.13) = Nat s / n.
How to calculate the amount of Gross, if you know the amount of Net
Now, realizing exactly, the amount of Net is what it is, the amount of Gross is that it is possible, knowing Net, to count Gross by the inverse method. In general, the formula is: Net / 0.87 = Gross. But in order to finally understand all these calculations, consider this formula in more detail. For example, it is known that an employee’s payroll amount already with a deducted tax payment amount is 40 thousand rubles. This is our Net s / n. So, we can say that Gross - tax = 40 thousand rubles. Knowing how to calculate the amount of tax payment, we will substitute it into this formula and get: Gross - (Gross * 13/100) = 40 thousand rubles. Further, by mathematical transformations (bringing the common factor beyond the brackets), the gross salary * (100% - 13%) = 40 thousand rubles is obtained. Then it is necessary to transfer the percentages to the right side of the equation and express them in fractions.And the result will be: Gross-salary = 40 thousand rubles. / 0.87 = 45977 rubles.
Using the above information, you can find the answer to the question: “Net and gross: what is it?”, And you can easily calculate the amount you need. This knowledge will help to avoid awkward situations when applying for a job.