What is a Gross Salary?

Gross salary is the aggregate amount of fixed wages earned by a person over a specific period of time. Thus, one might refer to gross salary per week, month, or year. The most common usage of the term is gross salary earned over a year. The amount of gross salary paid is impacted by a number of factors, including a person’s job classification, education, and experience level, as well as the cost of living in the local area.

Management and some administrative employees are typically paid salaries, while hourly personnel are paid wages. This amount is prior to the application of taxes and other deductions, which results in net salary, and which may be a substantially smaller amount.

Gross salary is requested during credit checks, and is used by lenders and creditors to set a credit limit for an individual.

Example of Gross Salary

Henry is paid a base salary of $50,000 per year, plus a bonus of $5,000. His gross salary is these two forms of earnings combined, or $55,000. This amount will be subject to deductions, resulting in a net salary that may be substantially less than the gross salary figure.