What does "net salary" refer to?

Net salary refers to the amount of money an employee takes home after all applicable deductions, such as taxes, social security, insurance contributions, and retirement plan contributions, have been removed from their gross earnings. This figure provides a clear picture of the actual income available for spending, saving, or investing. Understanding net salary is crucial for budget planning and financial management because it reflects the true amount an employee receives in their paycheck.

The other choices do not capture the complete definition of net salary. For instance, total earnings before deductions denote the gross salary, base pay without bonuses refers to a specific component of compensation that does not account for total earnings, and average monthly salary simply represents an average rather than the specific take-home amount after deductions.