Difference Between Gross 1 and Gross 2
Both terms sound similar, and both amounts differ significantly from your Net salary, but the difference between them is crucial for the functioning of the tax and pension-health system.
Gross 1 (Your salary)
The amount from which all deductions belonging to the employee (such as pension contributions) are calculated.
- Written in the employment contract
- Pension is paid from it
- Taxes are paid to the state from it
- Net salary remains after these deductions
Gross 2 (Employer cost)
The amount that, in addition to the Gross 1 salary, includes levies that burden the employer directly.
- Not necessarily written in the contract
- Includes Gross 1 + contributions "ON" salary
- Primarily covers health insurance
- Represents the actual money the employer spends from the company account to pay the worker's salary.
Simple Difference Formula
The easiest way to remember it:
Note on insurance: It is interesting to note that "you pay" for your pension by setting aside a part from your Gross 1 (contributions from salary), while your employer pays for your health insurance (contributions on salary), making Gross 2 higher. The result of these levies makes an essential administrative difference between these two terms in salary calculation.