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Gross Pay, Net Pay and Deductions

What is gross pay, net pay and deductions

Gross pay is the total of an employee’s pay, including all allowances, overtime pay, commissions and bonuses. It is the amount of money before any deductions are made. The amount remaining is called net pay.

Deductions from pay are a regular amount of money subtracted from a person’s wage or salary. Some deductions can include income tax, superannuation, health insurance and union fees.

An easy formula to remember this is: Net pay = gross pay – deductions

 

What is gross pay, net pay and deductions in greater detail

The video below explains all of these concepts in greater detail, and also covers PAYG tax.

Part 1

 

Part 2

 

 

How to navigate a payslip and calculating net pay

The following video explains different features of a payslip and how to calculate net pay from this.