What is Gross Salary?
Definition
Gross salary is the total amount an employer pays an employee before any deductions such as PAYE tax, UIF contributions, pension fund contributions, or medical aid.
Explained Simply
Gross salary includes basic salary plus all taxable additions: overtime, commission, bonuses, allowances (travel, housing, cell phone), and fringe benefits (company car, interest-free loans). In South Africa, gross remuneration is the starting point for calculating PAYE. It's important to distinguish between gross salary (before deductions) and cost-to-company (CTC), which is the total cost to the employer including their contributions to UIF, SDL, and pension.
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Related Terms
PAYE (Pay As You Earn)
PAYE is the system through which employers deduct income tax from employees' salaries and pay it directly to SARS on their behalf each month.
Net Salary
Net salary (also called take-home pay) is the amount an employee receives after all deductions — including PAYE, UIF, pension contributions, and medical aid — have been subtracted from their gross salary.
Cost to Company (CTC)
Cost to company is the total amount an employer spends on an employee, including gross salary plus employer contributions to UIF, SDL, pension fund, medical aid, and other benefits.
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