Net Salary

What is net salary ? — The term ‘net salary’ refers to the total amount of money one receives after all mandatory deductions have been made from the gross salary. 

How is net salary calculated? — Net salary is calculated by subtracting all deductions from the gross salary, such as taxes, social security contributions, pension contributions, and other withholdings. The deductions involve statutory as well as voluntary deductions. 

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

Is net salary the same as take-home pay? — Yes, net salary tends to be referred to as take-home pay, as it represents the actual amount of money an employee receives after deductions have been made. 

Can my net salary differ month to month? — Yes, the net salary can vary due to factors affecting the gross salary (bonuses, overtime pay, etc.), as well as factors affecting the deductions (social security rates, tax class, etc.) that are applied on the gross salary resulting in the net salary. 

Which salary is stated in an employment contract? — Usually, job advertisements, wages discussed with the employers, etc. all refer to the gross salary, as the deductions applied leading to the net salary depend on each individual person. 

How can I calculate my net salary? — Employees can use our online salary calculator (https://salary.lu/en/simulators/gross-net-calculator) specific to Luxembourg to estimate their net salary, taking into account income tax brackets and social security contributions. This tool can help you estimate the amount you will actually take home each month.

Synonyms : take-home pay, take-home income, take-home, net earnings, net wage, real wage, wage after taxes, net income