what is gross salary

Gross salary refers to the total amount of pay an employee earns before any deductions or taxes are taken out of their wages. It includes all forms of earnings such as wages, salaries, bonuses, commissions, and other forms of compensation. Employers use gross pay when discussing compensation with employees, such as $60,000 per year or $25 per hour. Gross pay is also usually referenced on federal and state income tax brackets. The method for calculating gross wages depends on how the employee is paid. For salaried employees, gross pay is equal to their annual salary divided by the number of pay periods in a year. For hourly employees, gross pay is calculated by multiplying the hourly rate by the number of hours worked.