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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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Gross Pay

What is gross pay?

Gross pay is the total compensation an employee receives before any deductions are applied. This includes the base salary or hourly wage, bonuses, commission, and any other forms of compensation outlined in the employment contract.

For employers, gross pay is a critical factor in labor cost analysis, budgeting, and financial reporting. It represents a substantial portion of the total cost of employing individuals within an organization and serves as a basis for calculating employee-related expenses, including benefits, taxes, and employer contributions.

For employees, it is an important consideration when taking on a new role. However, they will also be likely to consider the full package and look at benefits such as retirement plans and health insurance.

It’s important to distinguish gross pay from net pay which defines the total figure an employee receives after deductions are applied. Employers must effectively communicate the components of both gross pay and net pay to their workforce as this helps employees comprehend the true value of their compensation package.

An HR platform such as Multiplier makes it easy for both employees and employers to manage and understand gross pay, net pay, and benefits. In an intuitive dashboard, they can view a breakdown of key figures.

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