What Is Gross Pay?
Last updated June 11, 2026
Gross pay is the total amount you earn in a pay period before any deductions are taken out. It includes your regular wages plus extras like overtime, bonuses, and tips. Net pay is what is left after taxes and other deductions come out of gross pay, and it is the amount that actually reaches your bank account.
Gross pay vs net pay
The difference comes down to timing. Gross pay is the number at the top: everything you earned before anything is subtracted. Net pay is the number at the bottom of your pay stub, after taxes, insurance premiums, retirement contributions, and any other withholdings come out. Net pay is often called your take-home pay because it is what you actually take home.
When a job offer lists a salary or an hourly rate, that figure is almost always gross. Your real deposit will be smaller once deductions are applied, so it helps to know which number you are looking at before you budget around it.
What gross pay includes
Gross pay is more than your base wage. For most workers it can include:
- Regular wages — your hourly rate times hours worked, or your base salary.
- Overtime — extra pay for hours beyond the standard workweek.
- Bonuses — performance, holiday, or signing bonuses.
- Commissions — earnings tied to sales or output.
- Tips — reported gratuities, common in service jobs.
- Shift differentials — added pay for night, weekend, or holiday shifts.
All of these are part of gross pay because they are money you earned before any deduction is applied.
How to calculate gross pay
The method depends on whether you are paid by the hour or on a salary.
Hourly worker: multiply the hours you worked by your hourly rate. If you worked more than 40 hours in a week, the hours past 40 are paid at 1.5 times your rate under the federal Fair Labor Standards Act (FLSA). The formula is:
Gross pay = (regular hours × rate) + (overtime hours × rate × 1.5)
Salaried worker: divide your annual salary by the number of pay periods in the year. The formula is:
Gross pay per check = annual salary ÷ number of pay periods
Common pay schedules give 52 weekly periods, 26 bi-weekly periods, 24 semi-monthly periods, or 12 monthly periods per year. See what a pay period is for how those differ.
A worked example
Hourly: Say you earn $18 per hour and work 42 hours in a week. The first 40 hours are paid at your regular rate, and the 2 overtime hours are paid at 1.5 times $18, which is $27 per hour.
- 40 hours × $18 = $720
- 2 hours × $27 = $54
- Gross pay for the week = $720 + $54 = $774
Salaried: Say your annual salary is $60,000 and you are paid bi-weekly, which is 26 checks a year. Divide $60,000 by 26 to get $2,307.69 in gross pay per check.
What turns gross pay into net pay
Net pay is what remains after deductions are subtracted from gross pay. Those deductions typically include federal, state, and local income taxes, Social Security and Medicare taxes, health insurance premiums, retirement contributions such as a 401(k), and any wage garnishments. Each one lowers the amount that reaches your account.
How much comes out depends on your earnings, where you live, how you filled out your tax forms, and the benefits you signed up for, so net pay varies from person to person. Because of that, this page does not estimate net pay or quote any tax figures — gross pay is the consistent starting point, and the deductions on top of it are individual.
Frequently asked questions
Is gross pay before or after taxes?
Before. Gross pay is your full earnings with nothing taken out yet. Taxes and other deductions are subtracted from gross pay to arrive at your net, or take-home, pay.
Does gross pay include overtime?
Yes. Overtime is part of your earnings for the period, so it is included in gross pay. The same goes for bonuses, commissions, and tips.
Is the salary on a job offer gross or net?
It is gross. A quoted salary or hourly rate is your pay before deductions, so your actual deposit will be lower once taxes and withholdings are applied.
Related tools and guides
- Time Card Calculator — add up hours worked across a week and see your gross pay, including overtime.
- Salary to Hourly Calculator — convert an annual salary into an equivalent hourly rate.
- Overtime Pay Calculator — work out overtime earnings at 1.5 times your regular rate.