Gross pay is the total amount you earn before deductions are taken off. On a UK payslip, it is the pay figure before deductions such as Income Tax, National Insurance, pension contributions and student loan repayments.
How gross pay works
Gross pay is the starting point for payroll. Your employer calculates the pay you have earned, then deducts tax, National Insurance and any other payroll deductions to arrive at net pay.
Gross pay can be shown weekly, monthly or annually. Job adverts and employment contracts usually quote gross annual salary, while payslips often show gross pay for the pay period.
net pay = gross pay - payroll deductions
Examples of gross pay
Gross pay can include more than basic salary. It can include any taxable pay earned before deductions.
- A job advert shows a salary of £35,000 per year.
- A monthly payslip shows gross pay of £2,916.67.
- An hourly worker earns £15 per hour before deductions.
- A bonus is added to salary before payroll deductions are calculated.
- Overtime is included in total gross pay for that pay period.
If your monthly gross pay is £3,000 and your deductions are £750, your net pay is £2,250.
Gross pay vs net pay
Gross pay and net pay are closely connected but not the same. Gross pay is before deductions. Net pay is after deductions and is often called take-home pay.
Gross pay
The amount earned before Income Tax, National Insurance, pension and other deductions.
Net pay
The amount actually paid into your bank account after deductions have been taken off.
Need the full explanation?
Read the guide that explains gross pay, net pay and common payslip deductions.
What deductions come off gross pay?
The deductions from gross pay depend on your circumstances, tax code, pension, student loan plan and employer payroll setup.
| Deduction | What it means |
|---|---|
| PAYE | Income Tax deducted through payroll. |
| National Insurance | Employee NI contributions deducted from earnings. |
| Pension contribution | Money paid into a workplace pension. |
| Student loan repayment | Repayments taken through payroll if earnings are above the relevant threshold. |
| Other deductions | Could include benefits, repayments, attachments of earnings or payroll adjustments. |
Why gross pay matters
Gross pay matters because it is the figure used for salary offers, payroll calculations, tax estimates, pension contributions, mortgage checks and many job comparisons.
- Job offers: salaries are usually advertised as gross annual pay.
- Pay rises: increases are usually calculated from gross salary.
- Pensions: workplace contributions may be based on gross pay or qualifying earnings.
- Tax: payroll starts with gross taxable pay before deductions.
- Budgeting: gross pay helps compare jobs, but net pay is better for monthly spending.
Calculate gross pay to net pay
To estimate how much of your gross pay becomes take-home pay, use the take-home pay calculator. It can factor in salary, region, pension, student loan plan and other deductions.
Turn gross pay into take-home pay
Estimate monthly net pay after tax, NI, pension and student loans.
Gross pay FAQs
Is gross pay before tax?
Yes. Gross pay is before Income Tax, National Insurance and other payroll deductions.
Is gross pay the same as salary?
Sometimes. Annual salary is usually a gross pay figure, but gross pay for a payslip period can also include overtime, bonus or commission.
Is gross pay what I take home?
No. The amount you take home is net pay, which is gross pay minus deductions.
Why does my gross pay change each month?
Gross pay can change if you receive overtime, bonus, commission, unpaid leave, pay adjustments or changes in hours.