What Does Total Wages Mean?

Your total wages are calculated before tax and national insurance contribution deductions.

Total or gross wages refers to the total amount of money you are paid by your employer including bonuses, overtime and other allowances, over a period of 12 months. The total wages is therefore your gross earnings prior your tax, national insurance contributions and other authorized deductions. Conversely, your net wages is the amount you actually take home with you after your deductions.



Total wages is the total sum of your gross earnings prior to deductions during a calendar year. Your total wages includes any earnings you have accumulated at your job, such as basic wages and any additional bonuses, allowances, commissions, vacation pay, sick leave pay, maternity and bereavement leave. Total wages do not include fringe benefits, such as gas allowance, study courses sponsored by your employer for career advancement or any loan agreements negotiated with your employer.


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Your employer is required by federal law to deduct tax and national insurance contributions from your total wages. By law, the employer cannot effect any further deductions unless the employee explicitly authorizes further deductions from his total wages. Employees can authorize deductions to pay for an additional savings or retirement plan, health insurance, or to advance payments to a third-party company. In the cases of alimony payments or court orders, employees may have further deductions from their total wages.


Other Deductions

Your total wages can be further deducted without your authorization in some exceptional cases when you were erroneously overpaid by your employer. Late attendance or unjustified absences and even being absent from work due to a workers' strike justifies your employer to effect deductions from your total wages.



When filing your tax return, you must report to the IRS the amount of your total wages and not your net wages for a given year. Your eligibility for tax rebates and benefits is calculated on your gross income. In addition, the gross income in your tax return is different from your total wages. The gross income for tax purposes refers to all of your income during a given year, including any other income you earned from a part-time job or personal business, and even interest you have accumulated on your savings.