Salary vs. Gross Salary: Can Someone Explain the Difference?

Hi to all,

Can somebody tell me the difference between salary and gross salary?

Regards,
Sharad

Hi Sharad,

Gross = Salary + Employers' ESI and PF Share + Gratuity + Bonus.

Net Salary = Gross - Employers' PF Share - Employers' ESI.

CTC = Gross + Cash value of all fringe benefits.

Hope it will clear your doubt.

Amit Goyal

Dear,

What you get per month is a salary. Gross salary is the addition of all the benefits, i.e., medical, conveyance, food, traveling claim (LTA), trips for official trips, study trips or with family on vacation, social security costs like PF, Mediclaim policy premium, LIC premium, etc. When added to the package and divided by the equal number of payment modes in the year, such as months, the gross salary is considered.

Dear All,

The Gross Salary is the total payable salary of an employee for a month. It includes all the benefits he is getting in terms of cash in a month. Whereas Salary is the net payable amount of that month after deductions of the employee's PF & ESI contribution, not the employer's, any advance taken, Professional tax, and any other deduction.

In general, when we give the payslip, we do mention the payable amount on one side, whereas deductions to be made on the other side. The remaining amount that is going to be paid is called the salary of that month.

Regards,
Amit Seth.

Hi Priya,

The ESI is an Act, and every employee covered under this has to contribute 1.75% of their gross salary, where the employer also deposits 4.75% of the gross salary.

The formalities for ESI are that you must have a strength of 20 employees, regardless of whether they are receiving a salary of more than 10000/- or less. The maximum ceiling of ESI contribution is up to 10000/- Gross/Month only. Those earning 10001/- will be exempted from the ESI.

ESIC stands for Employee State Insurance Corporation.

The employer should register the factory or establishment with the ESI Corporation within 15 days of the applicability of the ESI Act. The registration declaration must be filled in Form 01, along with a separate sheet containing the name and address of the establishment, the number of employees, the nature of duty, and the name, designation, and address of the manager controlling such persons for offices located outside. Once satisfied with the application, the ESI regional office will assign a code number to the employer.

Only after this can you register your employees with the ESI. They must fill out a declaration form, FORM 1, clearly indicating Male or Female. All declaration forms should be countersigned by the employer.

Next, prepare a return of declaration in Form 3 separately for Male & Female within 10 days of filling out the declaration form.

Every employee will then be assigned a temporary identification number.

Hope this is clear to you now.

Feel free to revert if there are any problems in understanding.

Regards,

Amit Seth.

Hi Priya,

ESI is the social security measure under which an employee can avail free treatment and hospitalization facilities at designated ESI dispensaries and ESI Hospitals. ESI stands for Employees' State Insurance. Any establishment employing 20 or more employees has to be covered under the ESI Act. All those employees whose monthly salary (all cash components payable on a monthly basis) is up to Rs 10,000 are to be covered under ESI. For coverage under ESI, an employee has to contribute 1.75% of Net Salary, and at the same time, the employer is liable to contribute 4.75% of the net salary of the individual employee. For any further clarification, feel free to ask.

Amit Goyal