What does gross earnings include?

Gross earnings represent the total income earned by an employee before any deductions are taken out, such as taxes, health insurance, or retirement contributions. This total comprises all sources of compensation, including base salary, bonuses, overtime pay, commissions, and any other forms of incentive pay. By focusing on gross earnings, employers and employees can have a clear understanding of the full financial compensation before any necessary deductions occur.

This definition is crucial as it distinguishes gross earnings from net pay, which is what an employee takes home after deductions. Understanding gross earnings helps in assessing the overall compensation package and financial planning for both employers and employees.