Net salary is the amount of money that the worker actually receives for their work on the payroll.
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It is calculated by subtracting from the gross salary the worker’s contributions to Social Security and the corresponding Personal Income Tax withholdings.
What is deducted from gross salary
The amounts that are deducted from a worker’s gross salary to obtain the net salary are the following:
- Social Security contributions: the withholding percentage will be different depending on the type of contract.
- Personal Income Tax withholdings: the withholding percentage is also variable. The higher the salary, the higher the withholding percentage will be.
Salary negotiation
In general, when a salary is negotiated, it is done gross, that is, the total salary referring to payment for work performed before applying taxes or Social Security contributions.
It is very easy to confuse both concepts, so you must know well the difference between both concepts so that salary negotiations are not a disaster.
Always keep in mind when you negotiate a salary, whether it is gross or net. If it is net, perfect, it is the effective amount you will receive.
If it is gross, before deciding, calculate what you will actually receive.
There are many calculators that convert gross salary to net on the Internet that although they will not give you a 100% exact amount, will be close enough to help you make a decision.
I hope this information is very useful to you ;)