In order to know what your final monthly salary will be, it is necessary to define what is the gross salary and what is the net salary. The gross salary is the total amount that a worker receives by his employer in compensation for his services. Instead, the take home pay is money that the worker will finally receive after deducting the withholdings from the gross salary.
Calculating the net salary will help you to know the exact amount of your salary, and in this way to be able to make forecasts of income and expenses. Usually, job offers are made in terms of gross salary per year. What do I have to do to know my final salary?
Social Security contributions
Withholdings from Social Security are used for cover aspects such as sick leave, work accidents or unemployment benefit. To calculate the net salary, it is necessary to know your gross salary and the type of contract you have. Temporary contracts have a retention of 6.4% of the contribution base, while the permanent have a retention of 6.35%.
Personal income tax tranches
The Personal Income Tax (IRPF) is a progressive tax, that is, the more you earn, the more you pay. It serves the State to finance public spending and it is applied through a deduction in the worker’s payroll, which the employer withholds from his gross salary to pay it to the Treasury in his name. The sections are as follows:
2021 IRPF tranches
- From 0 to 12,450 euros: 19%
- From 12,450 to 20,200 euros: 24%
- From 20,200 to 35,200 euros: 30%
- From 35,200 to 60,000 euros: 37%
- From 60,000 to 300,000 euros: Four. Five%
- Starting from 300,000 euros: 47%
It is important to clarify that these withholdings and salary bands They are not applied directly, but by modules. For example, for a person with a gross salary of € 30,000, 30% is not directly applied to the entire salary. You will pay 19% for the first € 12,450, 24% for the next € 7,750 and 30% for the remaining € 9,800.
Examples of gross and net pay
If you add the Social Security contributions and personal income tax withholding, you will know the total withheld from your salary. If we subtract this amount from your gross salary, you will obtain the liquid amount to be received. Despite the fact that there are other variables that influence the data such as age, family burden or professional category; lThe two taxes explained above are the main. An example would be the following:
With a gross annual salary of 30,000 euros, personal income tax withholdings will be 4,938 euros and Social Security contributions of 1905 euros. With this, the annual net salary will be 23,157 euros and the monthly, of 1,929 euros.