Cookie Notice
By accepting all cookies, you ensure the best possible user experience. Read more about cookies and their use or change your cookie settings.

What is the difference between gross and net pay?

Truster
·
March 1, 2024

You're filling in an application or form, and suddenly you hit a blank. Have you ever got your gross and net pay mixed up? Don't worry, you're not the only one who has. We've put together an information pack for you on gross pay, net pay and what's most commonly deducted from your gross pay. Useful information for anyone thinking of becoming a light entrepreneur, and for anyone!

Taxes and contributions are deducted from gross pay

The gross salary is a nice, clear amount, but unfortunately you will never see it in your account in full. When you talk about your salary in an employment contract or even in a job advertisement, it is expressed as gross salary. Taxes and other compulsory contributions have not yet been deducted from this amount. You will not receive the full gross salary, but the remaining amount after deductions. The amount of deductions from your salary depends on many things. We explain this in more detail below.

The net salary appears in your account

The net salary is all yours! Net pay is the amount you receive after deductions. Deductions are the statutory contributions that your employer or billing provider is obliged to pay. You don't have to worry about deductions, whether you have a traditional employment relationship or are a light entrepreneur working through a billing service. You can use your net pay as you see fit. After your own expenses, of course.

Tip! When signing a contract as a light entrepreneur, think carefully about your pricing. How much do you want to be paid after the compulsory payments? Ask us for advice!

What all is deducted from gross pay?

Taxes, i.e. withholdings, are deducted from your gross pay at your tax rate. In addition, contributions to occupational pensions, unemployment insurance, health insurance and accident insurance, among others, are deducted. Your money is not wasted, it is there for your benefit. You don't have to do anything. If you are employed, your employer will make sure that your payments are taken care of and your taxes go to the tax authorities.

At Truster, we have taken the system to a new level. If you're thinking about becoming a light entrepreneur, what kind of security would you need to make your working life better? Take a look at the options and choose the right package from Truster.

How much of your salary will you have left?

When you agree to a new job through the light entrepreneur billing service, or enter into a new traditional employment relationship, you cannot agree on a net salary because each of us has an individual tax rate. Your tax rate has a significant impact on how much money you have left to spend. You can draw some indicative conclusions about your tax rate based on how much you earn in a year, where you live and how old you are, but each person will still have their own tax rate.

Are you sure the net salary is correct?

Do you feel that your net salary is lower than it should be? Or wondering if you have paid enough in withholding tax? Keep your tax rate up to date to avoid any nasty surprises at the end of the year. 

It may be difficult to predict your earnings for the whole year in advance, but the taxman still wants some kind of estimate. If you earn more than you thought, it's worth raising your tax rate a little - and vice versa. You can change your tax rate online at any time. And it's worth it! You won't keep paying too much tax or, even worse, you won't have to pay tax afterwards in the form of a penalty.

Did you like the blog?
You'll probably like these too:

Blog

Tax deductions & tax return for light entrepreneurs

Save up to hundreds of euros by completing your tax return.

Read the story >
Support article

The importance of receipts in accounting

Read the story >
Blog

Mileage allowances for self-employed persons

Read the story >
ABC of the light entrepreneur

What is the difference between gross and net pay?

Read the story >
ABC of the light entrepreneur

What does light entrepreneurship mean?

Read the story >
ABC of the light entrepreneur

Can a light entrepreneur get unemployment benefit?

Read the story >
ABC of the light entrepreneur

Can an unemployed person be a Light Entrepreneur?

Read the story >
ABC of the light entrepreneur

Summer job 2024 for students

Read the story >
ABC of the light entrepreneur

How does the OP light entrepreneur service differ from Truster light entrepreneurship?

Read the story >
ABC of the light entrepreneur

Is light entrepreneurship profitable?

Read the story >
ABC of the light entrepreneur

Who can become a Light Entrepreneur?

Read the story >
ABC of the light entrepreneur

Is a light entrepreneur a self-employed person?

Read the story >
ABC of the light entrepreneur

Is the employment condition fulfilled in light entrepreneurship?

Read the story >
ABC of the light entrepreneur

Is a Light Entrepreneur an entrepreneur?

Read the story >
ABC of the light entrepreneur

Who is light entrepreneurship suitable for?

Read the story >
Support article

What is YEL insurance?

Does a light entrepreneur need YEL insurance? How do I get YEL insurance?

Read the story >
Blog

Daily allowances, mileage and meal allowances 2024

Do you want to know the amounts of the expense allowances for 2024? Read this article to get the latest information on daily allowances, mileage allowances and meal allowances for this year.

Read the story >
Support article

The trump card - what would be good to know?

What is a Valuable Card and what is it for? What is a Valvetikortti for a light entrepreneur and can you order one through Truster?

Read the story >
Blog

A social influencer or influencer as a light entrepreneur?

The career paths of many of our influencers have started as light entrepreneurs. Light entrepreneurship is a low-threshold option to try entrepreneurship and charge for partnerships.

Read the story >
Support article

Pricing of the work of a light entrepreneur

It is worth pausing for a moment to consider pricing, as there are many things to take into account when pricing the work of a light entrepreneur.

Read the story >
Blog

How to choose the right billing partner?

When a company employs several people as light entrepreneurs, it may be time to consider working with an invoicing service.

Read the story >
Blog

What should you know about employing a light entrepreneur?

Has your company considered employing a light entrepreneur? If so, good!

Read the story >
Support article

How do I know if my customer has paid the invoice?

How do you know if your customer has paid the invoice you sent them? You can find out the status of your invoice in the following ways:

Read the story >