The formula
employer cost = gross + employer contributions · net = gross − contribution − tax withheld
Where it comes from
Between what an employer pays out and what the employee receives there are three layers: the employer contributions, which never appear on the payslip; the employee's own contribution; and the tax withheld. Each is worked out on the gross, which makes the gross the hinge of the whole system.
How to work it out by hand
- Add the employer contributions to the gross for the cost to the company
- Subtract your social contribution from the gross
- Subtract the tax withheld
- Compare the result with the employer cost you started from
What is worth knowing
This is the number worth having clear before negotiating and before considering going self-employed. If the company pays 39,000 and 23,595 arrives, every rise costs it 30 % more than it adds to you, which is why benefits in kind or extra days off are sometimes the cheaper ask. And the other way round: anyone thinking of invoicing as a freelancer should compare against the total cost, not against their gross, because the total is what the company stops paying.