Once you begin earning money and paying taxes, you will hear the words gross pay, net pay and deductions quite often. 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.
How to Navigate a Payslip and Calculating Net Pay
The following video explains different features of a payslip.
Want to learn more? Check out more of our Preliminary Standard Maths resources here!