"Net" and "gross" are terms common in the international labor market, which have only recently begun to be heard in Russia. Both of them relate to the designation of wages, but there is a significant difference between them.
The terms “net” and “gross”, which are actively used in the labor market in English-speaking countries, are increasingly heard from the lips of Russian employers and workers. At the same time, since their use is a relatively new practice, one can find their writing in writing using both the Latin and Cyrillic alphabets.
Gross
The term "gross" is used to refer to an employee's wage level, which is the full amount of money spent by the employer to pay the employee. It comes from the word, found in different variants in many European languages, which means "large", "full", "gross".
Considering the amount of remuneration of workers, it should be borne in mind that in the Russian Federation, as in most other developed countries, citizens' incomes, including wages, are taxed. Therefore, the "Gross" wage is not at all the amount of money that the employee will receive in his hands: on the contrary, taxes that must be paid on wages in accordance with current legislation will be deducted from this amount.
In the Russian Federation, to determine the amount of wages corresponding to the definition of "gross", it is necessary to add the value of the so-called regional coefficient to the salary set for the employee in accordance with the staffing table, which is an addition to the salary used in the case of work in difficult climatic conditions.
In world and Russian practice, there are also other terms used to denote the amount of remuneration before taxes are paid. So, one of the options for its designation is the term "brutto" or "gross". In addition, in Russian, this amount of wages is sometimes called "dirty".
Net
By contrast, net means the amount of money that the employee receives after deducting all necessary taxes. Also, the term "net" wages is used to denote it - in fact, this is exactly the literal translation of the Italian word "netto", from which the name "net" originated.
Depending on which category of employees we are talking about, the tax rates applied to them in the Russian Federation may differ. However, the majority of employees are subject to the obligation to pay 13 percent personal income tax (PIT), which is deducted from the “gross” salary to obtain the “net” value.
At the same time, it should be borne in mind that the current Russian legislation determines that the obligation to pay taxes on the wages of employees rests with the employer: that is why he is usually aware of both amounts of employee income - before and after taxes, while the employees themselves get their hands on only "net" wages.
