Difference between Gross Salary and Net Salary

Vyakhya

Warm Regards To All,

Well can one tell me what's the difference between Gross Salary and Net Salary

Regards
Srishti

Vyakhya

What I think is that the Gross Salary is the total CTC and Net is what you get in hand.Am I right Seniors.

Regards
Srishti

rollysrivastava

Hi srishti

Net salary is the take home salary of the emolyee while gross salary is the figure before making statutory or other deductions.
gross salary is basic+ HRA+ trnasport+ other allowance.
Gross salary minus pf contribution, ESI contribution, professional tax contribution etc. (as per applicability ) becomes net salary.
Hope its clear...
do revert back for further querries...

rolly

jawaid

Hi srishti,

As far as my salary slip tells me!!!!!!!

Goross salary = Salary before deductions

Net Salary = Salary after deductions

Jay

swastik73

Dear Sristhi,

Gross Salary is the agreed/committed compensation your Organisation agrees to pay on a monthly(periodic) basis aginst your services for that period.

Net Salary is gross salary less the deductions which are made on account of statutory compliances(like PF, ESI, Income Tax, Professional Tax) and other dues (Like Loans and Advances taken) which you owe to the Company and Legal dues if any. It is something you get in hand and commonly refer to as Take Home Pay.

Your Income Tax is based on the Gross Pay.

While CTC or Cost to Company is equal to Gross pay + Benefits, Perks and Prequisites i.e., the total Cost a Company incurs in employing the person.

Regards,
SC

Anu_B

Dear All,

In case of PF contribution by employer being included in CTC, how do we arrive at Gross.........is that element not included?

Best Regards'
Anu

rollysrivastava

no...
employer contribution towards PF or ESI does not form a part of gross salary.

rolly

devjit28

Hi,

Just a small input from me about this.

Quote:

Originally Posted by swastik73

Your Income Tax is based on the Gross Pay.

Income Tax is based on annual CTC (or Total Income) which includes all perks & perquisities.

Also, as per my understanding, Gross Salary is the total salary received on MONTHLY BASIS. This excludes the annual components like LTA, bonus etc. CTC is Gross Pay + annual components + perks/benefits/perquisites, whether in cash or kind. Net pay is the take-home pay, after all deductions.

However, some people refer to Gross pay as the total of only the CASH components. Non-cash components like driver, sweeper, company accomodation etc which the employee does not pay for are excluded. These are a part of CTC though.

Warm regards,
Devjit

dheerajgoyal

Hi devjit

Could we have come percentage splits of each of these components in compensation structure across industries ... lets say for an IT , ITES , FMCG , Pharma , Auto , Consultancy , Financial Setup , Govt ...

Regards
Dheeraj

devjit28

Hi Dheeraj,

I do not have even the foggiest idea about the industry splits. If I do come across the data, I will surely share it here.

Warm regards,
Devjit