Gross pay and net pay: what is the difference?
Gross pay is what you earn. Net pay is what reaches your bank. See how one becomes the other.
This path is practice in how the records and the sums work. It is not tax advice. Any rate or allowance in a question is an example for that question, so check GOV.UK for the current figures.
In this room: 3 tasks, 9 questions
- Before and after deductions4 questions
- A month with extra pay3 questions
- Why a rise is smaller than it looks2 questions
- Gross pay
- everything you earned in the pay period, before anything is taken off
- Deductions
- the amounts taken off, such as income tax, National Insurance and pension
- Net pay
- what is left, and what is paid into your bank. It is also called take-home pay
Net pay is gross pay less deductions.
Maya's salary at Greenlatch Garden Centre is £30,000 a year, paid in twelve equal parts. In May her deductions add up to £565.
| Item | Amount |
|---|---|
| Gross pay | 2,500.00 |
| Total deductions | (565.00) |
| Net pay | ? |
Answer the questions below
3 more questions follow in this task.
Extra pay, such as overtime, is added to gross pay. The deductions are then worked out on the new, bigger figure.
In June Maya earns £200 of overtime on top of her usual £2,500. Her deductions for June come to £635.
| Item | Amount |
|---|---|
| Basic pay | 2,500.00 |
| Overtime | 200.00 |
| Gross pay | ? |
| Total deductions | (635.00) |
| Net pay | ? |
Answer the questions below
2 more questions follow in this task.
Extra gross pay is not all yours to keep. Tax, National Insurance and pension are taken from the extra as well.
Maya's net pay was £1,935 in May and £2,065 in June.
Answer the questions below
1 more question follows in this task.