What does gross salary mean

Gross and Net Salary - What's the Difference?

Both terms, "gross" and "net", have their origins in Italian. Net means something like clean and beautiful looking, gross means raw and unclean. The gross salary is the total amount before taxes and social security contributions are deducted. What remains after they are deducted is the net salary that is paid out.

Net salary + taxes + social security contributions = gross salary

The gross salary includes all taxes and social security contributions. These include wage tax, the solidarity surcharge and church tax. The gross salary also includes social security contributions such as pension, health and unemployment insurance as well as long-term care insurance. If you subtract all these taxes from the gross salary, you get the net salary.

All taxes and deductions from the gross salary

Duties to the tax office (taxes)

  • income tax
  • Solidarity surcharge
  • Church tax

Social security contributions (social contributions)

  • Contributions to the statutory pension insurance
  • Contributions to statutory health insurance
  • Contributions to the statutory unemployment insurance
  • Contributions to statutory long-term care insurance

Additional taxes for the employer

In addition to the gross wage, the employer has to pay the following taxes:

  • Social security contributions
  • Statutory accident insurance contributions (must be borne by the employer alone)
  • Allocation U1 (from 30 employees, continued wage payment for employees in the event of illness-related incapacity)
  • Contribution U2 (financing of maternity allowance)
  • Allocation U3 (financing of insolvency money according to § 358 SGB III)

In addition, he can optionally pay the following allowances:

  • Sales force commissions
  • Special payments such as Christmas bonus or vacation pay
  • Surcharge for Sunday, public holiday and night work
  • Bonuses

The employer's wage costs (gross wage + ancillary wage costs) averaged 28% above the gross wage in Germany in 2017.

Example table: The difference between gross wages and net wages

The amount of tax depends on the salary and tax class

Taxes and social contributions are not regulated uniformly for every person. They sometimes depend on the level of income. In addition, the tax bracket plays a role in the amount of the net wage. Income tax, solidarity surcharge and church tax are determined depending on the respective tax class. This in turn depends on whether you are single, married, divorced or widowed and whether you have children in the household. You can easily find out how much of your gross salary is left with an online salary calculator.

See also:

»The salary calculator - the gross net calculator