What is Gross 2?
Gross 2 salary, often known as "Total employer cost", represents the actual financial amount your company must allocate to employ you and pay your salary.
What does Gross 2 consist of?
Gross 2 is a broader and larger amount than Gross 1. Mathematically speaking, it consists of:
- Gross 1 salaryThe previously explained amount which contains your net salary, pension insurance, and taxes.
- Contributions "on salary" (Health and PIO at employer expense)These are additional levies that the state requires from the employer on top of the Gross 1 salary amount. In Serbia, this includes health insurance contributions and the portion of pension contributions borne by the employer.
Why is Gross 2 so important?
When you ask for a net raise, the cost of that raise for the employer is significantly higher due to all the levies to the state. Therefore, the employer always calculates Gross 2 to assess the total profitability of your job position.