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10 min czytania 1 August 2023

Gross how much is net?

Have you ever wondered how much of the money you get in hand actually comes from your gross salary? It may seem like a simple calculation, but in reality many factors can affect the difference between the gross and net amount in your account. What is the net gross salary calculator? Gross amount how much is net really? How to calculate net and gross salary? Read in the article below.

gross how much is net

CONTENTS:

Gross and net salary – what is it?

Gross and net salary are two different concepts that you need to know. They are mainly used in the financial industry, but also when describing the mass of goods. You hear about them very often, and yet some people can still confuse them. What exactly is gross and net amount? What is the difference between gross and net?

Gross salary

This is the total amount an employee receives for their work before deducting deductions such as taxes, National Insurance contributions and other employment-related costs. It is the remuneration that is agreed between the employee and the employer, set out in the employment contract or other contract. Please note that the net amount rarely appears on the contract, so what we have written in the contract is not the real amount we will get.

Net salary in hand

The net salary is the amount that the employee receives in hand after deducting all deductions from the gross salary, such as taxes, social security contributions, health insurance, pension contributions, etc. This is the actual amount that the employee receives at his disposal for his needs after meeting all tax obligations and insurance.

The basic difference between gross and net is that gross is the amount before the calculation of contributions and taxes, and net is the payment in hand, i.e. what we can realistically spend from our salary.

Gross how much is net – what is deductible?

Calculating your gross to net salary may seem like a simple task, but it’s actually more complicated than it sounds. Various factors, such as taxes, social security contributions and other deductions, affect the final payout value in an employee’s account. It’s worth knowing these hidden costs to avoid unpleasant surprises at the end of the month. What does it consist of?

  • Contributions: retirement, disability, health, accident and sickness insurance, Labor Fund, Solidarity Fund, Guaranteed Employee Benefits Fund, Employee Capital Plan
  • Income tax advance payment

Also Read: How To Negotiate Salary?

gross how much is net

​What is the net gross salary calculator?

The Net Gross Salary Calculator is an online tool that allows employees or employers to quickly and easily calculate their estimated net salary based on their gross salary. It is a practical tool that helps you understand how much money an employee will actually receive in hand after taking into account various deductions and taxes.

The operation of the net gross salary calculator is based on current tax and social security regulations. After entering the gross salary, the calculator performs the appropriate calculations and presents the estimated value of the net salary, taking into account income taxes, pension, health, social security and other deductions.

Net gross salary calculators are very useful when analyzing job offers or negotiating salary with the employer, because they allow the employee to understand how much money he will actually receive and what the differences between gross and net salary will be.

However, it is worth trying to calculate your gross net salary at least once. This will allow you to get acquainted with all the contributions and see how much is actually taken from our salary. Then we will know by eye how much more or less with a different gross amount we will be able to deduct.

What percentage of the contribution is deducted from gross salary in 2023?

The gross salary of an employee employed under an employment contract is subject to the deduction of various social security contributions. The percentage amounts of these contributions depend on the amount of gross remuneration. In 2023, the contributions deducted from the gross salary are as follows:

  • Pension contribution: 9.76% of gross salary (employer) and 9.76% of gross salary (employee).
  • Pension contribution: 6.5% of the gross salary (employer) and 1.50% of the gross salary (employee).
  • Sickness contribution: 2.45% of the gross salary (employee).
  • Accident contribution: 1.67% of gross salary (employer).
  • Health insurance: 9% of the gross salary (employee).
  • Labor Fund / Solidarity Fund: 2.45% of gross salary (employer).
  • Guaranteed Employee Benefits Fund (FGŚP): 0.1% of gross salary (employer).

It is worth noting that the interest rates of the accident contribution may change every year. Thanks to these contributions, the employer pays certain amounts for social insurance, and the employee bears his partial costs, which affect the final net salary.

Also read: Working illegally without a contract – what are the risks?

gross how much is net

Net gross salary calculator

How to calculate the gross net salary step by step in 2023?

If the contract has a monthly gross salary, we can calculate the net amount. How to calculate the net amount?

Let’s take the example of the national lowest, which has been in force since July 1, 2023:

First, all the employee’s ZUS contributions must be deducted from the amount of the payment of PLN 3,600

PLN 3,600 x 9.76% = 351.36 pension insurance

PLN 3,600 x 1.5% = PLN 54 disability insurance

PLN 3,600 x 2.45% = PLN 88.2 health insurance

Total employee contributions: PLN 493.56

All this sum should now be subtracted from the gross amount and then we will get the salary minus social contributions:

PLN 3,600 – PLN 493.56 = PLN 3,106.44

You need to calculate the health premium:

Health premium: PLN 3,106.44 x 9% = PLN 279.58

Then you need to calculate the advance payment for income tax:

PLN 3,106.44 – PLN 250 (deductible costs) = PLN 2,856.44

PLN 3,106.44 x 12% (tax threshold) = PLN 372.77

From this amount, subtract 1/12 of the tax-free amount, i.e. PLN 300:

PLN 372.77 – PLN 300 = PLN 72.77 – this is an advance payment to the Tax Office

Calculate your net salary. Subtract from the gross amount social security contributions, the sum of health insurance contributions and advance income tax.

PLN 3,600 – PLN 493.56 – PLN 279.58 – PLN 72.77 = PLN 2,754.09

Remember!

Gross Earnings – This is the amount before payroll tax and all National Insurance contributions have been deducted.

Net earnings – this is the amount in hand minus all contributions and tax. We get it on hand.

We hope that thanks to this article you no longer wonder how much is gross and how much is net. These are separate concepts that are worth knowing to avoid misunderstandings at work. You can convert gross net yourself or using ready-made salary calculators. Both forms are good, although the latter is much faster. However, it is worth knowing the basic concepts and having knowledge about the contributions that are deducted from our salary. Salary calculation is useful when our amount specified in the employment contract is in the gross rate.

Read also: Unemployment Benefit – who is entitled to it?

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