The net pay is the amount that is subtracted from the gross salary contributions to the general scheme of the Social Security and income tax deductions (Income Tax of Individuals).

A payroll is a receipt that the company is required to submit to the employee as proof of payment for the work performed. The list should include both the gross salary as net.

Income Tax Deductions

The wage labor is subject to Income Tax of Individuals (IRPF), a percentage that is determined by the gross income, marital status and number of children.

Other variables are taken into account in calculating them is the year of birth and whether they had recognized some type of disability.

The following table contains as an example the percentages are retained in each case:

It should be borne in mind that in some cases these deductions are temporary, since the Declaration of income there is a possibility of the return part or all of the amount withheld previously.

Contributions to Social Security

It is calculated by applying the contribution base percentage corresponding to the situation of the worker, that is, if you have a permanent or temporary.

The type of trading, ie the percentage that must provide Social Security is split between the worker and the company. The rates are set annually in the General State Budget.

Base price

It is the amount subject to the withholding tax, ie, that part of the salary on which the percentage of income tax as descontarlo corresponding to pass such a tax.

The contribution base is made up of the amounts that the company paid to the worker as a basic salary supplements, etc. Excluded from the contribution base subsistence allowances, overtime and social security benefits.

Type of trading

It is a rate established annually by the government to be paid by the employee and the company to Social Security for the services provided by this entity.

Paying these rates gives right to health care in public health and to benefits such as retirement, unemployment or sick leave.

The type of trading set for the year 2007 and contributions by other concepts mandatory for all workers include:

·  Contingencies common: 4.7%.

·  On unemployment: 1.55% for workers in general and 1.60% for workers with temporary contracts.

·  Training: 0.10%.

Other additional contributions affecting workers when appropriate is related to overtime:

·  Extra Hours: 4.70%.

·  Hours extra force majeure: 2%.

Parts of a roster

The payroll must adapt to a model officer recognized by the Ministry of Labor and Social Affairs and must contain certain information for the obligatory:

·  Company: name or business name, address, telephone number of contributions to the Social Security and CIF (identifier code Prosecutor).

·  Information Worker: name, address, number of people registered for social security, NIF (Fiscal Identification Number), date of rank and seniority.

·  Settlement Period: time worked to be rewarded. Generalmente los pagos se producen de forma mensual. Generally payments occur on a monthly basis.

·  Quantities economic perceive: money that the company paid to the worker for his work. Part of this money is subject to retnciones prosecutors.

·  Deductions: Amounts are deducted from wages to pay for the RPF and contributions to Social Security.

·  Total liquid to receive: final amount that is having subtracted the gross salary contributions to the Social Security and income tax deductions.

Accruals

They are the economic numbers to receive within it is necessary to distinguish these two kinds of perceptions:

·  Those who are subject to withholding taxes, ie those listed: base salary, salary supplements, the proportionate share of the payment of overtime and other aids for children. They form the basis of trading.

·  Those that are not subject to withholding tax, ie for non-listed: per diem, travel expenses and allowances, among others.

Deductions

They are those amounts are deducted from wages for contributions to the Social Security and payment of income tax IRPF. It is necessary to indicate the share and the amount that is withheld. It is calculated on the amount of gross salary rounded.

There are other deductions that do not affect all workers, due to medical insurance, pension plans or other products contracted by the company, in which it pays a portion and the other is for the worker.

Calculating net salary

The wages are usually negotiated with the companies is the annual gross. To calculate the monthly net wage is necessary to take into account the personal income tax deductions, contributions to social security and the number of payment.

Mandatory there are two extraordinary payment, but can be more. They often paid in Christmas and summer. But there is a possibility that should be apportioned in 12 payment.

All these aspects must be taken into account to calculate the net income. Example:

·  Gross annual salary: 15,000 €.

·  You Pay extraordinary: 2 (assessed at 12 months).

·  Gross monthly wage: 1.250 €.

·  Contributions to Social Security (6.4%): 80 €.

·  Withholding income tax IRPF (12%): 150.

·  Salary net (1,250 €  - 80 € -150 €)=1020 €.

Remarks

The cost of a worker to the company is higher than the gross income shown on the payroll because you have to pay 30% or 40% more general scheme of social security for every employee.