What is Gross Salary and the Formula to Calculate Gross Salary

In our career to become a responsible individual, the Gross Salary income towards our work is always determines to play a crucial role. There are numerous individuals who timely change and accept day to day daily job roles as per their education along with skills.

Gross Salary

It is always exciting to look at the first job Gross Salary. As that brings a start to your career growth, and this growth does change the responsibility you take. This will directly make a good impact on your salary earning. As well, one who is changing an organization will always seen at their total which determines their level and stage of performance.

Any individual who paid for their service to the company referred as Cost to Company and the CTC is such a company does give to the employee as per yearly basic with determining their entire components inside. It also made to be clear that cost to Company is different from a total salary, which is not equal to take home salary.

What is Gross Salary

This is the amount calculated by adding the entire allowance & benefits which is before the tax deduction. It is a combination of Gratuity, employee provident fund, HRA, Dearness Allowance according to the structure of the pay which the company designed based on employee working. Here are some basic components of the salary as described below.

  1. Basic Salary
  2. Dearness Allowance ( If Applicable)
  3. House Rent Allowance
  4. Special Allowance
  5. Conveyance Allowance
  6. Medical Allowance
  7. Educational Allowance
  8. Leave & Travel Allowance

Components not in Total Salary

This is a list of components which doesn’t include in the Gross Salary. This will not marked in the term calculation. These will add as extra pay which an employee gets based on their work for the company.

  • Refreshment or Snacks Allowance
  • Reimbursement Claimed from company
  • Allowances for Mobile & Data Bills

Gross Salary Formula

Gross Salary = Basic + DA + CCA + HRA + Allowances

Net Salary = G.Salary – Deductions

  1. Is Gross Salary Similar to Net Salary?

    The Net Salary is the amount that an employee takes to their home and will be free from a tax deduction, and the amount which is before the tax deduction that includes tax along with gratuity is your total salary and one which you carry to your home after all deduction is termed as Net Salary.

  2. Is Basic Salary and Gross Salary the Same?

    The Salary which is termed with add only the basic components and not including any allowances into it, and the basic salary will be mostly half of the total salary which only does include the basic component that is original pay for the work done by an employee in the origination.

  3. What is CTC is the Gross Salary?

    The Cost to Company is the amount decided by the company while recruiting an employee which involves the elements such as House Rental allowance, Gratuity Provident Fund and other allowance including the medical or any such, and the CTC is termed as the salary package given to an employee which makes extra part of Gross Salary.