Gross salary and net salary are the two terms by which most of the people go through these terms. Every person works for the salary these days. Gross salary is the total salary which includes basic salary + allowance + provident funds. Ant the net salary or take-home salary is the gross salary – taxes and the provident fund.
In India most of the person lives on the jobs. Jobs are nothing but hire people for work and give them salary. So every salaried person need to known about gross salary and net salary. In this article we will discuss in detail about Gross salary and net salary. And the difference between gross salary and net salary and other related aspects with gross salary and net salary.
Table of Contents
Gross salary vs Net Salary
| Sr. no. | Gross Salary | Net Salary |
| 1 | Gross salary is the salary which includes basic salary+ allowances without deduction. | Net salary is gross salary- taxes and EPF.
|
| 2 | Main components are HRA, medical allowance, holiday allowance and overtime | Main components of net income are EPF, Pension and income tax.
|
| 3 | Higher than the net salary. | Lower or sometimes equal to gross salary. |
| 4 | Calculated by adding all payments. | Calculated by the subtracting of taxes and penalties.
|
| 5 | Gross salary = basic Salary + allowance | Net salary = gross salary- tax deduction |
Gross salary
Gross salary is the salary which includes basic salary + HRA+ medical allowance + Conveyance allowance and house rent+ other allowance. This is the salary with out the deduction of tax or insurance and EPF. This salary also includes bonuses, holiday pay and overtime.
Gross salary is always more then the net salary. Sometimes net salary is equal to the gross salary when salaried person is not comes under the criteria of the tax.
Net salary
Net salary is the deductions like TDS, EPF and insurance. This salary is also known as the take home salary. Gross salary is always more then the net salary. Sometimes net salary is equal to the gross salary when salaried person is not comes under the criteria of the tax.
Main differencee between gross salary and net salary
- Gross salary is the salary which includes basic salary+ allowances without deduction. Net salary is gross salary- taxes and EPF.
- Gross salary’s main components are HRA, medical allowance, holiday allowance and overtime. While main components of net income are EPF, Pension and income tax.
- Gross salary is higher than the net salary. Net salary is lower or sometimes equal to gross salary.
- Gross salary is calculated by adding all payments. While net salary is calculated by the subtracting of taxes and penalties.
- Calculation Gross salary = basic Salary allowance. Net salary = gross salary- tax deduction
Conclusion
Gross salary and net salary very important for the salaried person. Many times, person got confused in the Gross salary and net salary. If particular have no knowledge about the gross salary and net salary employees remains in the dark. So, it’s very necessary to have knowledge about gross salary and net salary.
This is all about gross salary and net salary. Hope this article will clear your doubts. For any doubt please feel free to comment on us. For more interesting topics like this please go through our website.
Gross salary
Gross salary is the salary which includes basic salary + HRA+ medical allowance + Conveyance allowance and house rent+ other allowance.
Net salary
Net salary is the deductions like TDS EPF and insurance. This salary is also known as the take home salary. Gross salary is always more then the net salary.
Main differencee between gross salary and net salary
Gross salary is the salary which includes basic salary+ allowances without deduction. Net salary is gross salary- taxes and EPF.
Gross salary’s main components are HRA, medical allowance, holiday allowance and overtime. While main components of net income are EPF, Pension and income tax.