Financial glossary
Gross Pay
In plain English
Earnings before taxes and other deductions — the pre-tax figure used to compare job offers and pay rates on equal terms.
Gross pay is what you earn before any deductions — taxes, retirement contributions, health premiums — come out. It’s the number on an offer letter, and it’s what this site’s income calculators work with, because comparing offers pre-tax keeps the comparison apples-to-apples: taxes apply to both sides of any comparison, so gross pay isolates the actual difference in compensation.
Net pay (take-home) is what actually lands in a bank account, and it can be meaningfully smaller — federal and state withholding, FICA, and benefit elections routinely take 20–35% of gross. Budgeting off a gross annual salary divided by twelve overstates what’s actually available to spend each month.
Converting between hourly and annual figures — see the hourly to salary calculator — and pricing extra hours — see the overtime pay calculator — are both gross-pay calculations. Whatever the final take-home number turns out to be, it starts from gross.
Related calculators
- Hourly to Salary & Salary to Hourly CalculatorConvert hourly pay to annual salary or salary back to an hourly rate, with adjustable hours per week and weeks per year. Instant, accurate, free.
- Overtime Pay CalculatorCalculate your weekly and annual pay with overtime at 1.5×, 2×, or any multiplier — and see exactly what those extra hours add per year.