Gross pay
Total earnings for a pay period before any tax or deduction is taken.
Payroll glossary · Updated 2026-08-29
Gross pay is everything your employer owes you for the period: base salary or hourly wages, plus overtime, double time, bonus, commission, tips reported through payroll, shift differentials, retroactive pay and any taxable fringe benefit such as the imputed value of group term life cover above $50,000.
It is the figure quoted in an offer letter, the figure lenders underwrite against, and the starting point for every payroll calculation. It is not the figure you can spend — that is net pay, and for most workers the gap is between a fifth and a third of gross.
Gross pay is also not the same as taxable wages. Pre-tax deductions such as health premiums and traditional 401(k) contributions sit between the two, which is why the tax lines on a stub are never a clean percentage of gross.
Where you will see it
On a pay stub, gross pay appears at the very top of the earnings block, usually split into separate lines for regular hours, overtime, bonus and any other category, each with a current-period and a year-to-date column. The year-to-date gross is the figure worth watching: it tells you whether your annual pay is on track, and it is what should reconcile against Box 1 of your W-2 once pre-tax deductions are subtracted.
What it is often confused with
Gross pay is routinely confused with three other figures. It is not total compensation, which also includes the employer's share of health premiums, retirement match and payroll tax. It is not taxable wages, which is gross less pre-tax deductions. And it is certainly not net pay. When a lender, a landlord or a benefits form asks for income without specifying, they almost always mean gross.
2026 reference figures
The numbers below are the 2026 amounts that most often come up alongside this term. They change every year, so check the tax year before relying on them.
| 2026 figure | Amount |
|---|---|
| Social Security rate and wage base | 6.2% up to $184,500 |
| Medicare rate | 1.45%, no cap |
| Additional Medicare Tax | 0.9% above $200,000 of wages |
| Standard deduction, single | $16,100 |
| Standard deduction, married filing jointly | $32,200 |
| 401(k) elective deferral limit | $24,500 |
| HSA limit, self-only | $4,400 |
| Health FSA limit | $3,400 |
| Supplemental wage withholding rate | 22% up to $1,000,000 |
| W-4 Step 3 credit per qualifying child | $2,200 |
Common questions
How do I calculate gross pay?
For salaried employees, divide the annual salary by the number of pay periods. For hourly employees, multiply hours by rate and add overtime at the applicable multiplier.
Is gross pay before or after tax?
Before. Nothing has been deducted from it.