Gross Salary

What is gross salary? — The term ‘gross salary’ in Luxembourg refers to the total amount of money earned by an employee before any deductions. Such deductions include taxes, social security contributions, or other withholdings. 

How is gross salary calculated? — Gross salary is the total sum of all the earnings an employee receives, including base salary, bonuses, commissions, as well as any additional allowances (transport, meal vouchers, etc). 

What is the difference between gross salary and net salary? — Gross salary consists of one’s total earnings before deductions, and net salary (https://salary.lu/en/glossary/net-salary) consists of the remaining salary after deductions have been applied.  

Why is gross salary important? — Gross salary determines the base amount on which taxes and other contributions are calculated. It is also important for loan eligibility and other financial assessments. 

How does gross salary affect taxes? — Taxes are calculated based on gross salary. For example, depending on your tax bracket, the higher one’s gross salary is, the more they may be required to pay in taxes. 

Which salary is stated in an employment contract? — Usually, gross salary is the salary discussed between an employer and an employee when starting a job. The salary advertised in job announcements generally refers to the gross annual salary. 

Is overtime pay included in the gross salary? — Yes, overtime pay and other additional pays, such as bonuses, commissions, etc. 

Can my gross salary differ month to month? — Yes, the gross salary can vary due to factors such as changes in bonuses, overtime, tax class adjustments, or shifts in social security rates.

Synonyms: gross pay, gross payroll, gross earnings, salary, remuneration, income, gross income, wage