Gross and net pay: What’s the difference?

Knut explains it with the sack of hay: hay and sack together are called gross. Take away the sack, the tare, and what’s left is net, the hay. Pay works in a similar way. Gross is the number at the top of the pay slip, the whole wage before anything is taken out. Net is the number at the bottom, what you actually get. In the book’s example for Germany, that’s €3,000 gross and about €2,050 net. Only one thing is different from the hay: with pay, you don’t throw the sack away.

They don’t go missing, says Ina. The employer withholds the income tax and sends it to the tax office. The employer passes on the insurance contributions too, and keeps none of it. In the enclosure, the guinea pigs set out bowls for this: a big one for the tax, which pays for schools, roads and the fire department, and smaller ones for the insurance. Toffy’s line: Deducted is not lost. It’s just there for someone somewhere else.

Rocky promises Jonas €3,000 net, plus applause. Christian notices: Same digits, different number. With net, you have to work backward, and the more someone earns, the bigger the deductions get. In the example, the top line would have to say about €4,750 gross, and Knut would pay almost €5,900 in total. That’s over two thousand euros more, every single month. Jonas puts it this way: I’d rather have a clear gross than a dream net that nobody can deliver.