A step-by-step of earnings, deductions and charges, including the differences between contract types.
Earnings: the starting point
Calculation starts with earnings: base salary, add-ons (night shift, hazard pay), overtime and benefits. It’s the sum of everything the employee is entitled to in the period.
Classifying each pay item correctly is essential, because it defines what enters the base of each tax and contribution.
Deductions and charges
Deductions apply on top of earnings: social contributions, income tax and others required by law or agreement. Each has its own base and rate, which vary by country.
There are also employer charges, which don’t come out of the employee’s pay but make up the total payroll cost.
Net pay and review
Net pay is what remains after deductions — the amount that actually reaches the employee. Before paying, it’s worth checking totals and reviewing exceptions.
With Avos this whole flow is automatic: open the period, calculate, review and approve. The figures come out with each country’s correct tables.