Where does the word gross come from?
Gross and net - what is what?
What is the gross and what is the net? It's not just young employees who keep getting confused when it comes to gross and net. You will also be confronted with these terms again and again in accounting and as an entrepreneur. It’s very easy. One definition says: gross is what you get and net is what you keep. You can therefore assume that the gross value is always the original amount, from which taxes, insurance premiums and the solidarity surcharge are deducted, which results in the net. This applies to both a company's profits and salaries.
The meaning of the terms
Gross comes from the Latin term "brutus" and means cumbersome, dull or impure. The meaning of the choice is unclean here - because the gross has to be adjusted by deducting taxes and Co.
"Netto" is an Italian term and means "pure". So it is the adjusted amount.
The gross and net profit
In bookkeeping and accounting, companies differentiate between gross profit and net profit. On the one hand, gross profit is gross profit, i.e. profit from which costs and taxes must first be deducted. However, the term is often used synonymously for the contribution margin.
Net profit is the profit that was actually made - from which costs, expenses and taxes have already been subtracted.
Gross and net in terms of salary
The salary that is in the contract always corresponds to the gross. Employees must bear this in mind when negotiating salaries. Because taxes such as wage tax and church tax, social security contributions for, for example, health insurance and pension insurance as well as solos are deducted from the gross salary.
How to calculate gross-net?
What ends up in your own account is your net salary. You can do the calculation yourself. However, you need to know some data to do this. You need this data for the calculation:
- Your gross salary
- Your tax rate as a percentage
- the amount of your social security contribution
- the amount of the solidarity surcharge in percent (5.5 percent of wage tax)
- if applicable, the church tax rate in your federal state
To now calculate your net salary, all you have to do is deduct taxes, social security and solos from your salary.
Even easier: ask online calculators
With a gross-net calculator, you can easily find out online how much wages are left over from the gross. Good gross-net calculators also include an existing allowance. All you have to do is enter your tax class, your place of residence, your age, your gross salary for a month or a year and, if applicable, allowances and church affiliation. Then have your net wage calculated.
Married people have more in their pockets
In Germany, married people can benefit from spouse splitting and thus significantly reduce their tax liability. You have the option of having your joint income taxed in equal parts at the same tax rate. In this way they usually achieve considerable tax savings compared to individual taxation. You can also determine the effects of this online with a suitable salary calculator.
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