28/1/19 Gross income v. Net income
In general terms, gross income is the revenue generated over a period of time and net income is the profit made from that revenue when total expenses are taken out. However, both terms have different meanings depending on the context where they are being discussed:
For a company, gross income is essentially how much the company makes on a product minus expenses directly related to creating the product (without taking into account any selling and administrative expenses or taxes).
On the other hand, net income is the amount of profits that remain in the business after all expenses have been paid.
For individuals, gross income can be defined as the total wage or salary they receive from an employer before taxes and other deductions are taken out of their paycheck.
Conversely, net income is the residual amount of earnings after all deductions have been taken from the gross pay, such as payroll taxes, garnishments, and retirement plan contributions. In other words, net income is the money employees are left with.