Gross Earnings
Categories: Accounting, Metrics
You get hired at a telemarketing firm selling vacation packages to Tbilisi, Georgia. Your salary is $48,000 a year, which means your monthly paycheck should be $4,000. Except, when the check comes, you only have $2,920 to deposit in your bank account. Where did the rest go?
The problem is that the $4,000 figure is just your gross earnings. It's the amount you're nominally supposed to make, before any taxes or other costs are taken out.
Unfortunately, that's not the amount you get to take home. All those taxes and the charges for health insurance and the deduction for renting the company-owned phone you use to call customers all come out of the gross figure. That leaves you a net earnings amount...the amount you actually get to deposit.