Gross Pay Definition

The amount of salary or wages earned by an employee before any deductions or contributions are subtracted from the total earnings.

Gross Pay Extended Definition
Also known as “gross wages” or “gross income,” gross pay is an individual’s total earnings before subtracting taxes and other deductions (e.g., their hourly wage or salary).

Taxes and deductions include:

  • Federal income tax
  • Medicare and Social Security taxes
  • State and local income taxes
  • Health and dental insurance premiums
  • Retirement contributions
  • Contributions to flexible spending accounts

The employee will only have access to their net pay, or take-home pay, for the purpose of paying bills, rent, etc.

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Last Updated By

Rachel Blakely-Gray | Apr 27, 2023

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