Distinguish between Gross Pay and Net Pay - Leaving Cert Business - Question 4 - 2008
Question 4
Distinguish between Gross Pay and Net Pay.
Gross Pay:
Net Pay:
Worked Solution & Example Answer:Distinguish between Gross Pay and Net Pay - Leaving Cert Business - Question 4 - 2008
Step 1
Gross Pay:
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Answer
Gross Pay refers to the total amount of money earned by an employee before any deductions are made. This includes not only the base salary or hourly wage but also additional earnings such as bonuses, overtime pay, and any other financial benefits received. It is calculated as follows:
extGrossPay=extTotalPaybeforedeductions
Step 2
Net Pay:
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Answer
Net Pay is the amount an employee takes home after all deductions have been subtracted from the Gross Pay. Deductions may include taxes such as PAYE (Pay As You Earn), PRSI (Pay Related Social Insurance), and other contributions. It can be calculated using the formula:
extNetPay=extGrossPay−extDeductions
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