1 November 2019

Gross salary and net salary: important aspects

piles of coins on a table, accompanied by 100-euro banknotes.

When accepting a job offer, it is important to be aware of both gross salary and net salary, The second one will be the one that will be the one that will be finally received by the worker.

However, beyond wage-related aspects, it is also necessary to assess the elements relating to the social benefits that accompany the offer. In many cases, these may constitute a fundamental complement to the employee's salary. 

Table of contents

What is the difference between gross salary and net salary

It is referred to as gross salary to the salary the worker will receive before the appropriate deductions are applied to it (taxes).

On the contrary, the net salary will be the final result of subtracting the part corresponding to withholdings from the gross salary and will constitute the actual cash available to the worker on your account.

In this way, gross salary and net salary are intimately related. However, it is very important to distinguish between them and, above all, not to confuse them with each other. 

How to calculate the difference between gross salary and net salary

In general terms, to calculate the difference between gross salary and net salary, you simply need to deduct the withholdings that will be applied to the gross salary.

However, the problem when calculating this difference is that these withholdings are not the same in all cases, but rather take into account different elements that will make these withholdings greater or lesser.

On the one hand, the first thing to take into account will be the amount of gross salary received. In this regard, there are different wage brackets and as these thresholds are higher, the deductions applied to them will also be will grow proportionally

On the other hand, another important aspect to consider when calculating the difference between gross and net salary will be the type of contract (undefined or otherwise) and the type of contributor to be.

Finally, other aspects related to the The person's family situation, as well as the number of dependent children ...of the working person, will be elements that will also determine the final deductions that will be applied to the gross salary. 

Employee benefits beyond salary

On the other hand, beyond gross and net salary, there are other elements that constitute benefits for workers and that are not linked to salary.

And, consequently, they are exempt from withholding tax. They are what are commonly known as employee benefits, and can be of many types. 

Undoubtedly, the main benefit that an employee usually gets for his or her work is the salary, which usually constitutes the main source of income. the bulk of its economic benefits.

However, the social benefits that a company can offer its employees can be very varied and, furthermore, depending on the case, can be better adapted to the personal needs of each employee.

These social benefits can be presented in different ways. One of them is the Flexible remuneration. In this case, part of the employee's salary is converted into social benefits, with the advantage that these benefits are exempt from tax burdens, so, in the end, they constitute a way to increase the employee's purchasing power. 

Examples of employee benefits

Examples of social benefits include the following. Not forgetting that there are management tools that allow this type of product to be managed quickly and securely.

  • Transport TicketIt consists of a ticket which allows the employee to pay for their transport and travel, which can be used both for commuting and personal travel. In this way, the employee saves the cost of financing this expense out of his or her own pocket. 
  • Nursery TicketOne of the most valued accessories by the Families with children in their care This employee benefits option, as it allows them to cover the full or partial cost of childcare for their dependents, which represents significant savings at the end of the month. 
  • Ticket RestaurantIt is one of the most widely used social benefits, as it allows access to different Food and catering services, which constitute basic expenses for anyone, both in their professional and personal lives.

As can be seen, these types of social benefits go beyond the worker's gross and net salary. However, by constituting elements that contribute to covering their expenses, allow the worker to increase his purchasing power, The tax is not lost in the form of withholding tax if you simply increase your basic gross salary.

Edenred Spain

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