What is Net Salary?
Definition
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.
Explained Simply
Net salary = Gross Salary - PAYE - Employee UIF (1%) - Pension/Provident Fund Contribution - Medical Aid Employee Portion - Any other deductions (garnishee orders, loans). In South Africa, the net salary is what appears on the employee's bank statement. Common confusion arises between net salary and cost-to-company (CTC), which includes employer contributions not reflected in the employee's pay.
Free Tool
Salary / Take-Home Pay Calculator
Calculate your monthly take-home pay after PAYE, UIF, and pension deductions using current SARS tax brackets.
Related Terms
Gross Salary
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.
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.
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