Net Salary - what it is and how to calculate it?

Net salary is the actual amount an employee receives in their bank account after all mandatory deductions have been applied.
This is the amount people use for budgeting, evaluating job offers and planning their financial capabilities.

What net salary is

Net salary reflects the employee's "clean" income. Unlike gross salary, which shows the total calculated amount, the following have already been deducted here:

income tax,
social security contributions,
individual allowances and deductions, if applicable.

Therefore, net salary shows best how much income a person actually receives and how much money they can use for daily needs, savings and regular payments.

Where the term "net" is used

The term is used in various situations related to personal finance:

in employment contracts — to specify the amount an employee will receive "in hand";
in payslips, where the final payable amount is shown;
in salary discussions, when a candidate states how much they want to receive "net";
in family financial planning, such as budgeting or determining creditworthiness;
when comparing job offers, where it is important to understand what remains after taxes.

For most people, net salary is the main indicator because it reflects the actual income, not a nominal number.

Net salary calculation example

For example, an employee is assigned a gross salary of 1400 EUR per month.

After taxes and social contributions are deducted, the net salary is approximately 1050-1120 EUR, depending on individual conditions, applicable allowances and tax rates.

Thus, the difference between the calculated amount and the actual income can reach 20-30%.

Find out your net salary in seconds

To understand how much you will actually receive after taxes, it is most convenient to use the salary calculator on this website.

It will automatically calculate net and gross amounts, take contributions and deductions into account, and help compare different income scenarios without manual calculations.