difference between gross salary and net salary
is critical for employer and employee, for different reasons. For the company, because it complies with the provisions of the legislation when making the corresponding withholdings; and, for the employee, by the fact that he will know how much he actually charges.

In this article, we offer you more details about these concepts and explain the practical way to calculate gross and net salary.

What is gross salary?

The gross salary is the one that the worker has stipulated by contract; and usually, when the employer talks about salary, it will refer to the gross amount.

It is important to note that, for the calculation of the gross salary, the base salary and supplements will be added.

What makes the difference between the two concepts is that two deductions are applied to this figure,which make the total amount received by the employee less than what he formally charges.

Income Tax Withholding

The withholding tax (Personal Income Tax) is a percentage that will depend on the gross salary, and the personal and family situation of the employee.

As a general principle to follow, whoever receives the most will paythe most, since the IRPF is a tribute of a progressive nature.

Social Security Withholding

Takes note of the deduction for
Social Security contributions,
which are of four types and have the function of maintaining the Spanish welfare system:

  • Common contingencies
  • unemployment
  • Accidents at work
  • Vocational training

What is the net salary?


When you differentiate between gross salary and net salary, you talk precisely about how much you are really going to receive.

Companies are obliged to withhold and pay directly to the Tax agency and Social Security the amounts deducted. Therefore, the worker usually collects the net amount, already discounted.

How to calculate the net salary

To calculate the net salary, you have to perform the following methodical steps, which will allow you to know how much you will receive. Now, it is especially important to follow them to the letter:

  1. The gross salary is taken as a reference to perform the calculations,considering as elements that configure the base salary and the salary supplements.
  2. Income tax withholdings are discounted. There are tables by income level that allow the calculation to be made to save time, although they have to adjust to the family and personal reality of the worker.
  3. Social Security contributions are deducted. They are the result of applying the gross salary plus the apportioning of the extraordinary payments and the percentages legally established by: common contingencies, vocational training and unemployment.

The result, once the discounts on the gross salary have been made, is the amount that the worker will actually receive.


Knowing the difference between gross salary and net salary is essential to earn in anticipation and avoid misunderstandings that are very expensive. Although, usually, you know that there are withholdings, it is preferable to ask this question so as not to lose purchasing power.

These reasons are what make it advisable to know in detail this circumstance because, in short, information is power.

At AYCE Laborytax, our
has the doors open to provide you with all the information you need in labor, tax and accounting matters. Looking for professional help? We are your team!!.