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Gross pay

What is gross pay?

Gross pay is everything an employee earned in the pay period, before anything is taken off.

Extra pay, such as overtime, is added to gross pay.

The deductions are worked out on gross pay. What is left is net pay.

Example

An employee has a salary of £27,600.00 a year, paid in 12 equal parts. Gross pay for one month is £2,300.00.

Why it matters

Gross pay is not what reaches the bank. The deductions come off first, and they are worked out on the gross figure.

Practise it

  1. 1Gross pay and net pay: what is the difference?7 min, easyFree
  2. 2How to read your payslip6 min, easyFree
  3. Salary or hourly pay: how gross pay is worked out6 min, easyPremium
Module, 5 rooms, PremiumGross pay
Practise it nowGross pay and net pay: what is the difference?

Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].