{"id":1134,"date":"2019-07-01T15:08:13","date_gmt":"2019-07-01T15:08:13","guid":{"rendered":"https:\/\/www.sage.test\/en-au\/blog\/?post_type=sage_glossary&#038;p=1134"},"modified":"2026-01-29T17:40:37","modified_gmt":"2026-01-29T15:40:37","slug":"what-is-net-pay","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-za\/blog\/glossary\/what-is-net-pay\/","title":{"rendered":"What is net pay?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/\" class=\"entry-header__link\">Glossary definition<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is net pay?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is net pay?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/what-is-net-pay\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<p>Net pay is an employee\u2019s earnings after all deductions are taken out. Some deductions are obligatory, like PAYE and UIF. Other deductions come in the form of benefits, which may be optional. Medical aid or a retirement fund may be offered through an employer. These costs will come in the form of a deduction from the employee\u2019s <u>g<\/u>ross pay, or salary.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-the-difference-between-net-pay-and-gross-pay\">What is the difference between net pay and gross pay?<\/h2>\n\n\n\n<p>Gross pay is pay before deductions. Jobs advertising a R40,000 salary are referring to gross pay. It may consist of tips, bonuses, commissions, overtime, wages, and so on.<\/p>\n\n\n\n<p>Net pay is pay after deductions. It\u2019s what\u2019s left over after taxes, medical aid, provident fund, and similar deductions have been accounted for.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-do-you-figure-out-your-net-pay\">How do you figure out your net pay?<\/h2>\n\n\n\n<p>Here is a formula to use to figure out your net pay:<br>\nNet Pay = Gross Pay \u2013 Taxes and Deductions<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-for-employers-what-does-net-pay-mean\">For employers, what does net pay mean?<\/h2>\n\n\n\n<p>A broader net pay definition includes implications for the employer, such as the obligation to match an employee\u2019s retirement or medical contributions.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Only a portion of an employee\u2019s costs are directly paid to the employee. Net pay refers to the amount an employee takes home, not the amount it costs to employ them.<\/li>\n\n\n\n<li>Retirement plan contributions, employee benefits, and taxes are deducted before an employee receives their net pay.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-for-employees-what-does-net-pay-mean\">For employees, what does net pay mean?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Net pay is take-home pay. Employees receiving gross pay of R50,000 may only take home R30,000 each month. It refers to income after accounting for retirement contributions, taxes, and so forth.<\/li>\n\n\n\n<li>Two employees working identical positions may have identical gross pay, but significantly different net pay. Medical plans, commission structures, and similar circumstances can substantially impact take-home pay.<\/li>\n\n\n\n<li>Gross pay is an accurate indicator of how well an employee is being compensated, but an inaccurate indicator of spending power.<\/li>\n<\/ul>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice enewsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-84fe79b5-668d-41f8-a0cc-6229018c4ac9\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Net pay is an employee\u2019s earnings after all deductions are taken out. Some deductions are obligatory, like PAYE and UIF. Other deductions come in the form of benefits, which may be optional. Medical aid or a retirement fund may be offered through an employer. These costs will come in the form of a deduction from [&hellip;]<\/p>\n","protected":false},"author":708,"featured_media":0,"template":"","meta":{"_sage_video":false,"footnotes":""},"tags":[166,185,335,199,200],"class_list":["post-1134","sage_glossary","type-sage_glossary","status-publish","hentry","tag-business-management","tag-employee-benefits","tag-making-financial-decisions","tag-payment-processing","tag-payment-security"],"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice South Africa","distributor_original_site_url":"https:\/\/www.sage.com\/en-za\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/sage_glossary\/1134","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/sage_glossary"}],"about":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/types\/sage_glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/users\/708"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/sage_glossary\/1134\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media?parent=1134"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/tags?post=1134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}