35.6% of Spaniards do not understand their payroll : are you in that percentage? Are you not quite familiar with the different salary concepts that appear? Let’s see what a payroll consists of, its key concepts and how it goes from gross salary to what you’re really going to enter.
First of all, what do we understand by a payroll? A payroll is an invoice, and as such, a series of minimum points (by law) related to the type of work or economic amounts must appear. We tell you the basic points:
At the beginning of everything on the payroll, the company and worker data are recorded. Of the company: name or business name, address or social security number. On the other hand, those of the worker also appear:
- Name, surname and Social Security affiliation number
- Professional category : the base salary will depend on it
- Workstation : the work performed by the employee. Depending on the valuation that each company has of the jobs, two people with the same category and the same basic salary but different jobs, may have different salaries
- Antiquity : influences seniority bonuses, promotions, awards or severance pay.
Accruals: what you receive
Accruals are income, and there are two types: salary accruals (quoted to Social Security) and non-salary . Non-salaries are those goods and services that the worker receives from the company but does not pay as salary (for example, restaurant tickets) and cannot exceed 30% of the total salary.
The salary accruals:
- The base salary is that amount agreed between company and worker where the total compensation you receive for your work is reflected.
There are different salary concepts that complement the gross salary but, unlike this, the company can increase them, reduce them or even suppress them according to their salary policy:
- Salary supplements : In addition to the base salary, according to the circumstances of each worker, a compensation is set, where they influence: responsibilities, knowledge, language, company benefits, etc. Also every certain number of years your salary increases thanks to the seniority supplement and represents a percentage of the base salary.
- Overtime : a compensation for hours worked beyond our working hours.
- Christmas and Summer Pay : those known as mandatory extra payments and that will depend on our agreement. We can charge them in 14 income, or they can also be prorated in 12 payments (1 per month).
- The payments in kind : all perceptions taxed and that the worker receives in goods other than money: house, child support, etc.
Deductions: everything that holds us back
- The deductions are the payments made by the employer to Social Security to cover the eventual disability leave, future pensions, unemployment insurance, etc. It is something that you get paid but does not reach your checking account.
- It also deducts the withholding of personal income tax (Income Tax for Individuals), which each worker will have different. It is the amount of money that will go to the Tax Agency, and with which we will subsequently make the Income Statement.
It is a percentage of your compensation that grows as you charge more and that also varies according to the number of children. That is why your salary may rise but so does the percentage of retention, so you would not notice that increase or even get less liquid.
Finally: what really reaches our pocket
- Liquid to receive : we would finally reach the monthly net salary , that is, what really comes into our pocket after taxes. This amount reflects the sum of the remuneration, plus the pro rata you pay extra, plus the remuneration in kind, subtracting the deductions.
And … With all this you will know if your payroll is correct! Easy, right?
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