What is Gross Income?

Gross income is your total earnings before any taxes, social contributions or other deductions — the headline salary figure agreed in your employment contract.

Gross income (Bruttoeinkommen, salaire brut, retribuzione lorda) is the amount printed on top of your payslip. It is the figure used in negotiations, mortgage affordability tests and most statistical comparisons of pay.

For employees, gross typically includes base salary, bonuses, 13th-month payments, allowances and the monetary value of certain benefits in kind. Stock grants, company cars and meal vouchers often add to taxable gross even if no cash changes hands.

Self-employed and freelancers calculate gross differently — usually revenue minus business expenses. From that gross they then pay both employee and employer shares of social contributions, which is why their effective tax burden is typically higher than for salaried workers on the same headline.

Example

A German engineer with a EUR 75,000 base salary, EUR 6,000 bonus and EUR 250/month meal vouchers has a gross income of EUR 84,000 for tax purposes.

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Related terms

Net Income

Net income is the amount of money you actually receive after all taxes, social contributions and mandatory deductions have been subtracted from your gross earnings.

Tax Bracket

A tax bracket is a range of income taxed at a specific rate; in a progressive tax system, higher income falls into higher brackets with higher marginal rates.

Effective Tax Rate

The effective tax rate is the total tax paid divided by total taxable income — the true average percentage your income is taxed at, always lower than the top marginal rate.

Marginal Tax Rate

The marginal tax rate is the percentage of tax paid on the next franc or euro of additional income — the rate that applies to the highest bracket your income reaches.

Frequently asked questions

Is gross or net more comparable across countries?+

Gross is easier to compare contractually, but net better reflects purchasing power. Use both — and adjust for cost of living.

Do benefits in kind count as gross?+

Usually yes — company cars, subsidised meals and housing allowances are added to taxable gross in most EU countries.

Why do mortgage lenders look at gross?+

Gross is harder to manipulate than net, which varies by deductions. Lenders use gross times a multiplier as the affordability cap.