The difference between gross and net salary is very important and must always be very clear, especially when you are going to apply for a job, because a salary expressed in gross gives a wrong perception of what is really charged. In this article we tell you what each one consists of and what options you have to complement your income, among them, the specific mini-credits of Conan the Barbarian.
What is the net salary?
We will start with the easiest concept to understand: the net salary. It is about the amount of money an employee receives in his checking account as a result of his work for a company. Therefore, it is the amount you can count on, which you can allocate to your daily payments: mortgage, rent, purchases, etc.
Difference between gross and net salary: the elements that make up a payroll
However, your payroll is made up of other amounts that make up the gross salary. Put another way: the employer pays more money for you than you charge month to month in your checking account. These are the concepts that make up the gross salary:
- Base salary : is the remuneration set as the basis for a certain job. It can be fixed by the employer or by a collective agreement.
- Pay supplements : are other benefits that can be received individually by a worker, in relation to many reasons: seniority, bonuses, etc.
- Non-salary accruals : they are complements that can appear in the payroll but do not count towards the Social Security contribution, since they are not part of the remuneration of the labor activity. They are called compensations or supplies , which the employer decides to deal with in a timely manner, such as the expense that an employee has had to make for the acquisition of clothing or material.
- Benefits to the Social Security : they are the income that an employer realizes to the account of the employee in the Social Security, that is to say, what we know like quotations. It is what will allow the worker to have a retirement pension or an unemployment subsidy, among other cases. This is precisely one of the disadvantages of the ‘salaries in B’: the employer, to save costs, does not enter all that owes to Social Security, causing a future injury to the worker, who can not collect in pensions or subsidies That really would correspond.
- Income Tax Withholding : this is another income that the employer makes to the Public Administration, in this case to the account of the employee in the Treasury as income tax (Personal Income Tax). Depending on what is withheld by the employer and the employee’s tax credits, the Income Statement is calculated : if the employee has been retained more than what is established by the regulations, the difference is returned with the Declaration of the Rent; and if it has been retained less than stipulated, the employee must make an extra payment to the Treasury.
The sum of all these concepts results in the worker’s gross salary.
How to complement the payroll?
No worker can charge less than the stipulated minimum interprofessional salary (SMI) , which is expressed in net figures and which for a full day is fixed in 2016 at € 655.20 per month or € 9,172.80 per year in 14 Pays (values that are modified over the years).
However, sometimes a worker’s net salary is not enough to meet daily expenses, even if the salary charged is widely higher than the SMI. In those cases, the employee should consider an additional complement to the payroll, either in a timely or permanent manner. Some of the solutions are:
- Make overtime : they are made outside the schedule set in the contract. They compute for the purposes of Social Security and IRPF, so it is an effort that is not only compensated in the successive payroll but also in the future through pension or unemployment.
- Having another job : it is usually a solution carried out by people who only have a part-time job, but also by others who with one or two hours of extra work in another company reach their desired income level. Be careful with this, because the Treasury can demand higher income tax withholding to those who have two payers.
- Payroll Advances : Sometimes, according to the company’s policy, the worker can request a payroll advance to cover a specific expense. It is convenient not to abuse this resource, because it can generate a negative image of the employee in the eyes of the employer and implies that his next payroll will be lower.
- Quick loans with asnef: a quick and easy solution for when extraordinary expenses occur. They do not involve long-term commitments with any entity, as they are returned in the maximum period of 30 days, as in Conan the Barbarian. In addition, having a payroll is practically a guarantee of acceptance of the application.