NET vs GROSS Salary: Detailed Calculation Guide 2026
Ezlun Team6 min read
The core difference between NET and GROSS salary lies in mandatory deductions. GROSS salary is the total income an employee receives before deducting insurance and personal income tax (PIT), while NET salary is the actual amount that goes into your bank account after all these deductions have been made.
Many employees often confuse these two concepts when applying for jobs, leading to negotiating a lower actual income than expected. To prepare a professional resume before negotiating compensation with a company, you can check your CV for free on Ezlun to review and complete your application information.
Note: The tax and insurance regulations below are for reference as of 2026. Actual figures may change depending on current legal regulations and the specific policies of each company.
What are GROSS and NET salaries?
GROSS salary is the total income amount that an employer agrees to pay an employee, including basic salary, allowances, and insurance premiums, and taxes that the employee is obligated to contribute. What is NET salary? This is the actual take-home pay that you directly receive each month after the company has deducted all mandatory contributions.
Understanding these two concepts helps you accurately assess the value of your employment contract:
GROSS Salary: Helps employees proactively control their contributions to social insurance (SI), health insurance (HI), unemployment insurance (UI), and personal income tax (PIT).
NET Salary: Helps employees easily manage their monthly personal expenses because this figure is the final fixed income.
Standard GROSS to NET Salary Calculation Method for 2026
To perform an accurate GROSS to NET salary calculation, you need to understand the mandatory deduction rates for employees according to current regulations.
1. General Formula
NET Salary = GROSS Salary - (SI + HI + UI) - PIT
In which, the common insurance contribution rates from an employee's salary are as follows:
SI: 8%
HI: 1.5%
UI: 1%
Total insurance contributions: 10.5% (calculated based on the salary used for SI contributions).
2. PIT Calculation Formula
PIT = Taxable Income x Progressive Tax Rate
Taxable Income = Assessable Income - Deductions
In 2026, PIT deduction items include personal family deductions for the taxpayer and deductions for each dependent as stipulated by the PIT Law.
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Detailed Comparison Table: NET vs GROSS Salary
To decide whether to negotiate for NET or GROSS salary during an interview, you can refer to the comparison table below:
Criteria | GROSS Salary | NET Salary |
Definition | Total income before deductions | Actual income received after deductions |
Transparency | High, easy to check insurance and tax contributions | Depends on the company's commitment |
SI Benefits | Entitled to maternity, sickness, unemployment benefits according to the agreed GROSS amount | Risk if the company circumvents the law, contributing insurance at the minimum level |
Tax Fluctuations | When PIT rates or laws change, NET salary may also change | Fixed income, the company bears the risk of increased taxes |
Popularity | Preferred by large corporations, multinational companies | Common in small and medium-sized enterprises |
Real-world example: Ms. Lan accepts a job with a GROSS salary of 20,000,000 VND/month. Total insurance deductions at 10.5% amount to 2,100,000 VND. After deducting personal family allowances, the remaining assessable income is calculated according to the progressive tax schedule. Ms. Lan's actual take-home pay will be approximately over 17,000,000 VND. If you don't know how to discuss your desired salary when applying, read more about how to negotiate salary to be best prepared.
Should you choose NET or GROSS salary?
According to many HR experts, employees should prioritize negotiating GROSS salary.
When negotiating GROSS salary, all costs are transparent from the start. You know exactly what percentage the company deducts for your social insurance and what percentage is paid for Personal Income Tax. Conversely, if you negotiate NET salary, some companies might circumvent the law by declaring your insurance contribution salary at the minimum level. This significantly reduces long-term benefits such as unemployment benefits, maternity leave, or future retirement funds.
Common Misconception: Only focusing on the actual monthly take-home amount (NET Salary) while ignoring the insurance contribution level in the contract.
Correct Approach: Negotiate GROSS salary, then calculate an acceptable NET amount yourself to ensure comprehensive social security benefits.
Important Notes When Negotiating an Employment Contract
To avoid future disputes, during the negotiation and signing of a contract, you need to pay attention to the following points:
Clearly state the salary type in the contract: The contract must clearly state whether the figure is GROSS or NET.
Clearly define the SI contribution salary: If negotiating NET salary, you must require the company to clearly commit to the base salary for monthly SI contributions.
Agreement on bonuses: Tet bonuses and KPI bonuses are often calculated based on basic salary or GROSS salary; this clause needs to be clarified.
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After understanding the calculation, compare salaries by industry at Industry Salary Comparison in Vietnam 2026.
This knowledge is very useful when negotiating salary. See negotiation strategies at How to Negotiate Salary in an Interview - 7 Effective Steps.
Frequently Asked Questions about NET and GROSS Salary
Is it permissible for companies to contribute SI lower than the GROSS salary?
According to labor law, the salary used as the basis for SI contributions is the salary, salary allowances, and other additional amounts as agreed in the contract. A company contributing SI lower than regulated is a violation of the law, except for allowances not included in assessable income for insurance purposes as legally defined.
What if the company delays paying PIT when I receive NET salary?
When a NET salary is agreed upon, the company is responsible for deducting and remitting PIT on behalf of the employee. If the company delays payment or makes incorrect declarations, the legal responsibility lies with the company before the tax authorities, unless the employee has other sources of income that require self-finalization.
Conclusion
Understanding NET and GROSS salary helps you protect your legitimate rights in all income negotiations. Prioritize choosing GROSS salary to ensure transparency of insurance contributions, and proactively calculate your actual take-home pay (NET) before signing an employment contract.
Prepare an impressive CV to achieve your dream income. Use Ezlun's free CV checker tool today to optimize your application!
