HR Tips: How To Calculate Your Net Salary & Make Sure You Are Not Cheated

By Elizabeth Benu,

“As a fresh graduate I am confused when it comes to salary negotiation. Almost all the job adverts I have come across indicate the salary as gross. But from what I have heard from others is that what you take home is the net salary. This being the case how do I ensure that I am not cheated during salary negotiation or that my boss does not deduct too much from my salary after I get employed? Is there a way to calculate my net salary?” asks Esther Thumbi in an email.

You may probably have heard of the terms gross pay, net pay or statutory deductions but are still unclear to you.

Net salary is the amount that is left from your salary once specific deductions have been made: it is what you take home. This is in contrast to gross salary which is the total amount an employee earns per month prior to any deductions.

Speaking to Abishagi Odiyo, a Human Resources Officer at ICRAF Kenya, she maintains that prospective employees should negotiate salary through the gross and not net pay.

“Gross salary entails the basic salary and other benefits such as the education allowance. With it you have a greater bargaining power. This will prevent you from getting a shock when your first cheque comes,” she explains.

How do you ensure that you are not cheated? I probe

Ms. Odiyo counsels that one should ensure the employer honours their word by documenting their agreement.

“Making sure they are documented ensures that it is binding and the employer cannot go against it,” she explains

“Prospective employees should also request for highlights of the basic pay, leave pay and other benefits such as education allowance or medical cover. They can be broken into monetary value with specifications on each. They should not be cumulative,” Ms. Odiyo advices.

Does the net salary include allowances? I ask

“This depends with the organisation. Some organisations have a net salary that includes allowances that can be issued in cash or those that are non-cash such as Staff transport benefit,” she illustrates.

And what are the mandatory deductions that are made from a salary you may ask

“The NHIF (depending on your income), Pay As You Earn (30% of total earnings), NSSF (5% of gross pay) and Pensions are some of the mandatory deductions that are made. Other may include loans, Education payment and sometimes even Tithe deductions from Christian organizations,” Ms. Odiyo elaborates.

She asks job seekers to be aware of these deductions saying that as much as one would negotiate their worth, at the back of their mind they should know of the deductions and the amount they will be left with at the end of the month.

“It is important to speak honestly to the employer and make any clarifications. Remember that whatever you take means you know what your worth is. Have your initial conversation and follow ups documented to avoid any future complications,” she concludes.

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