Gross pay
Gross pay is an employee’s earnings before deductions. It can include basic salary or wages, overtime, bonuses and other cash earnings specified by the employment terms. Calculate all earnings first, then subtract employee deductions to find net pay. The employer’s own contributions are normally additional staff costs rather than part of the employee’s gross pay.
Worked example
Basic pay of $2,000, overtime of $150 and a $100 bonus give gross pay of $2,250. Employee deductions of $450 leave net pay of $1,800.
Common mistake
Do not add employer contributions to gross pay or deduct them from the employee’s agreed earnings.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | F3 | Supporting | July 2027–August 2028 |
| ACCA | K1 | Direct | July 2027–August 2028 |
Related terms
Also called: Gross earnings, Gross wages