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1. Introduction
When receiving a job offer, candidates often focus on the salary figure but overlook whether it is a Gross or Net salary. Many people only look at their take-home pay without considering long-term benefits. So what is the difference between Gross and Net salary? Which one should you choose to maximize your benefits?
According to a survey by HRDept.vn, 70% of employees do not fully understand the difference between Gross and Net salary, leading to unnecessary disadvantages. Let’s dive deeper to make the best decision!
2. Gross Salary Vs. Net Salary: What’s The Difference?
| Criteria | Gross Salary | Net Salary |
|---|---|---|
| Definition | Total earnings before deductions for insurance and taxes. | The actual amount received after insurance and tax deductions. |
| Who Pays Insurance & Tax? | Employee pays from the Gross salary. | Employer deducts these before paying the employee. |
| Transparency | High—employees can track their contributions. | Low—employees may not know if the employer is paying correctly. |
| Impact On Benefits | High—social insurance contributions are based on the Gross salary. | Lower—benefits may be reduced due to lower contribution amounts. |
| Long-Term Effect | Higher retirement pension, unemployment benefits, and other allowances. | Potentially lower benefits due to reduced insurance contributions. |
"Salary is not just about what you earn today, but also about the benefits you receive in the future!" – HRDept.vn
3. How Are Gross And Net Salaries Calculated?
✅ Converting Gross Salary To Net Salary:
Net Salary = Gross Salary - (Insurance + Personal Income Tax)
For example, if an employee has a Gross salary of 20,000,000 VND:
Insurance (10.5%) = 2,100,000 VND
Personal Income Tax (5%) = 950,000 VND
⏩ Net Salary = 20,000,000 - 2,100,000 - 950,000 = 16,950,000 VND
✅ Converting Net Salary To Gross Salary:
Gross Salary = Net Salary / (1 - 10.5% - Income Tax Rate)
If an employee wants a Net salary of 16,950,000 VND, the Gross salary should be around 20,000,000 VND.
4. Should You Choose Gross Or Net Salary?
👉 Choose Gross Salary If:
✔ You want full control over your insurance and tax payments.
✔ You need to secure long-term benefits like social insurance, unemployment benefits, and maternity leave.
✔ You plan to work long-term and aim for a stable pension after retirement.
👉 Choose Net Salary If:
✔ You want to know exactly how much you will take home each month.
✔ You trust your employer to handle tax and insurance correctly.
✔ Your job is temporary or short-term, where long-term benefits are not a priority.
"Whether you choose Gross or Net salary, what matters most is understanding your rights and benefits." – HRDept.vn
5. Tips For Negotiating The Best Salary
💡 HRDept.vn suggests key steps to ensure you get the best deal:
✅ Clarify whether the salary offered is Gross or Net before signing your contract.
✅ Request a detailed breakdown of deductions if the company offers a Net salary.
✅ Compare Gross salaries between companies to get a fair market view.
✅ Use a trusted recruitment platform like HRDept.vn to find jobs with clear and transparent salary structures.
6. Conclusion
Both Gross and Net salaries have their own advantages and disadvantages. If you want to secure long-term benefits, Gross salary is the better option. If you only care about the immediate take-home pay, Net salary might be more suitable.
🌟 At HRDept.vn, every job listing clearly states salary and benefits, making it easy for candidates to compare and choose the best opportunities!