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Gross Salary
Definition
Gross salary is the total amount an employee earns before any deductions such as taxes, insurance, or retirement contributions.
Explanation
Gross salary includes your base pay plus any bonuses, commissions, overtime, and other compensation before deductions. It's the figure typically stated in employment contracts and job offers. From gross salary, employers deduct income tax, Social Security, Medicare, health insurance premiums, and retirement contributions.
The difference between gross and net salary is called the deduction total. Understanding gross salary helps you evaluate job offers and negotiate effectively.
Example
An employee with a gross salary of $60,000 per year may take home about $45,000 after taxes, insurance, and other deductions.