What is gross salary?

Gross salary is the agreed figure in your employment contract, usually stated as an annual amount and paid in equal instalments across the year. It covers your ordinary hours. Overtime, bonuses, commissions and allowances sit on top, so gross earnings for a pay period can be higher than the salary alone.

An effective packaging arrangement, such as a novated lease, comes out first, because the sacrificed amount is not assessable salary. The employer then withholds PAYG tax on what is left and sends it to the ATO on your behalf, along with any study loan repayment. Post-tax deductions such as union fees come out after that, and what remains is your net pay. Your income statement reports the reduced gross salary, plus any reportable employer super contributions, not the pre-sacrifice figure.

In Australia, super is usually paid on top of base salary rather than out of it. A role advertised at $90,000 plus super means $90,000 gross, with employer contributions worked out separately on your qualifying earnings.

Package roles work differently. A total remuneration figure already includes the employer's super contribution, so the cash salary underneath is lower than the headline. When you weigh up two offers, strip both back to cash salary and super separately, then look at any car, phone or bonus arrangements on top.

Applications ask for gross income because it is the verifiable number: it appears on your payslip, your income statement and your employment letter. Bonus and overtime income is often counted only in part unless there is a consistent history behind it.

The assessment itself runs on net income against your living costs and commitments. That is why two people on the same gross salary can be offered different amounts on a home loan: packaging, study loan repayments and dependants all change what is left each month.