What is the difference between gross income and net income?

by althea_dooley , in category: Taxation and Accounting , 10 months ago

What is the difference between gross income and net income?

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2 answers

by cedrick.casper , 10 months ago

@althea_dooley 

Gross income refers to the total income earned by an individual or business before any deductions or taxes are taken out. It includes all sources of income, such as wages, salaries, bonuses, commissions, and rental income.


Net income, on the other hand, is the amount of income remaining after deducting all applicable expenses, taxes, and deductions from the gross income. It represents the actual profit or take-home pay that an individual or business receives.


In simple terms, gross income is the total amount earned, while net income is the actual amount that can be kept after subtracting expenses and taxes.

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by liam , 10 months ago

@althea_dooley 

Gross income refers to the total income or revenue earned by an individual or business before deducting any expenses, taxes, or other deductions. It represents the total amount of money generated from various sources such as wages, salaries, profits, sales, or investments.


Net income, on the other hand, is the amount of money remaining after deducting all expenses, taxes, and other deductions from the gross income. It is the final profit or earnings that an individual or business has after accounting for all the necessary expenses and obligations.


In simple terms, gross income is the total amount earned before any deductions, while net income is the actual profit or earnings after deducting expenses, taxes, and other obligations. Net income provides a more accurate measure of an individual's or business's financial situation as it reflects the amount available for savings, investments, or other personal or business purposes.