Gross pay, net pay, and deductions
A salary offer is usually expressed as gross pay, while the number that reaches a bank account is net pay. Knowing the difference helps with job comparisons, relocation planning, and budgeting.
Start with gross pay
Gross pay is the agreed salary before employee deductions. It may be stated annually, monthly, weekly, or per pay period. It is a useful starting point, but it is not the amount available for rent, savings, or daily expenses.
To compare offers, put both salaries into the same period and currency first. An annual salary can be divided by twelve for a rough monthly comparison, but the payroll result can still change because employers may pay on a weekly, fortnightly, or biweekly cycle.
Understand the main deductions
Most employee deductions fall into three broad groups: income tax, regional or local tax where relevant, and employee social contributions. The names vary by country. Some payrolls also contain pension payments, health insurance, union fees, salary-sacrifice arrangements, or repayments that a simplified calculator cannot know.
These deductions are rarely a single flat percentage. Tax systems often use progressive bands, allowances, credits, thresholds, and annual caps. That means a larger salary does not necessarily lose the same percentage on every additional unit of income.
Use a calculator as a planning estimate
Global Tax Calculator separates the modeled deductions so you can see how a result is formed. This is useful for a first comparison, but it cannot replace payroll because it does not know every personal circumstance. Filing status, residence, dependants, benefits, bonus pay, pension arrangements, and local rules can change the final figure.
Questions to ask before relying on a number
- Is the offer base salary only, or does it include bonus, commission, equity, or allowances?
- Which country, state, province, or city will be your tax residence?
- Will you receive benefits or pension deductions through payroll?
- Does the estimate use the same tax year as your planned start date?
Use the calculator for an initial estimate, then open the relevant authority through the official sources directory before making a decision.