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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Net Pay

What does net pay refer to?

Net pay, also known as take-home pay, is the amount of money an employee receives after payroll deductions and withholdings have been subtracted. As opposed to gross pay (which represents a worker’s full wage), net pay represents the actual amount an employee will receive in their paycheck.

Deductions that can impact net pay include taxes, retirement contributions, health insurance premiums, and court-ordered garnishments. It’s the responsibility of an organization to calculate these figures and take them off the gross pay figure. However, this can be difficult with a global workforce when taxation rates and rules vary from country to country.

For automated calculations and smooth payments, it’s always best to use a global HR system such as Multiplier. This will automatically calculate gross and net pay each month, taking into account the taxation rules and benefits schemes in place with different employees working in different countries. Then employees will receive a clear breakdown of their income each month.

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