Gross pay and net pay are often confused. What is the difference then?
Gross salary is the salary sum from which the employee's expenses, i.e. taxes and other statutory payments, have not yet been deducted. For light entrepreneurs, the gross salary is usually the same as the VAT-free amount on the invoice.
Net salary, on the other hand, is the salary amount from with taxes and other government fees have been deducted. It is the amount of money you will receive in your account on the payday after all taxes. The net salary is what you practically have left in your hands after various payments and deductions.
Your net pay is greatly affected by the withholding tax rate on your tax card. As the net salary varies according to the withholding tax rate, it is not possible to present the salary directly as a net salary, for example in job advertisements or when agreeing to work. If the light entrepreneur has YEL insurance, YEL payments are deducted from the net salary.
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