What items a payslip includes
Every payslip is divided into earnings (what is paid) and deductions (what is withheld). The most common earnings are:
Key points
- Base salary: the fixed part agreed in the contract
- Supplements: seniority, shifts, languages, availability
- Extra payments: in Portugal and Spain they are usually prorated over 14 payments
- Non-salary earnings: allowances, mileage, compensation
From gross to net: what is deducted
The worker does not receive the gross salary. Tax withholdings and social security contributions are applied to it, and what remains is the net.
Key points
- IRPF (Spain), IRS (Portugal), IRPEF (Italy) or the country's income tax
- Employee social security contribution (11% in Portugal, for example)
- Other deductions: advances, garnishments or company plan contributions
How a payslip is calculated step by step
The calculation is always the same: all the month's earnings are added up, extra payments are prorated if applicable, and the withholdings and the employee's contribution are applied to the gross total. The difference between gross and deductions is the net that reaches the account.
What changes between countries are the rates and the schedules. Portugal pays in 14 monthly instalments; Germany in 12 (with an optional 13th or 14th depending on the collective agreement); France withholds at source and adjusts in the annual tax return.
Country-specific particularities
If you hire in Filnet's markets, these are the points that cause the most confusion when starting out:
Key points
- Portugal: 14 payments and an 11% employee contribution
- France: withholding at source and high employer contributions (42-45%)
- Germany: contributions of around 40% in total and withholding according to the Steuerklasse
- Italy: INPS contributions close to 30% of gross pay
- Dubai: no personal income tax or Social Security for expatriates; payroll via the WPS system
Common mistakes and how to avoid them
The most common mistake is confusing gross with cost: a salary of €1,500 gross costs the company considerably more once employer contributions are added. In Portugal you add 23.75%; in France, more than 40%.
The second mistake is withholding too little and facing an adjustment at the end of the year. Delegating payroll to a local adviser pays off from the first hire, especially if you operate in several countries at once.
