FinancePersonal Finance

Salary net and gross - what are these values?

When looking for a job and interviewing, especially if this is your first job experience, you will inevitably encounter the need to discuss salary (and this is often one of the main criteria for choosing a place). At the same time, two concepts - net and gross - will appear in the conversation (or description of the vacancy posted on the site). 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, perhaps, with the translation of these terms. In English there are concepts of net and gross. What are these definitions? The first is translated as "clean", the second - "full" or "general." How can this be deciphered in relation to the future payment of your labor? Very simple. Net wages are the amount after taxes, that is, money that you will receive directly on your hands or on a card. 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, one does not have to personally do this, since the given amount is transferred by the organization for the employee, and the remaining part (less 13%) is paid as wages. Gross - what is this value? And this is exactly the base with which the personal income tax is withheld, that is, the amount before taxation. It is indicated in the employment contract, but does not actually 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 can offer you a smaller salary, another one a little larger. But with a detailed acquaintance with the conditions of the one and the other it turns out that the first reported a salary net, the other - gross. What could this mean? And the fact that after deduction of taxes in the second case, the pay there will be the same or even lower (depending on the specific amounts and the difference between them). That's why you should always pay attention to these consoles.

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

90000 - 90000 * 0.13 = 78300.

Thus, having flattered for the difference of 5 thousand rubles and not knowing at the same time what the gross means, you will lose 6.7 thousand.

Naturally, if the difference is not too significant (and in any other case), it is necessary to pay attention to other factors. If we talk about the material benefits, then it can be different bonuses (monthly, quarterly), the availability of the 13th salary, bonuses for the fulfillment 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 "baits". This is medical insurance, and the opportunity to visit the fitness center, swimming pool, language and other courses and so on.

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

In general, before deciding where exactly to be arranged, it is necessary to evaluate the working conditions from all sides. And do not forget the main thing about salary (it is not important, net or gross) - that this is one of the key factors of choice, but not the only one.

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