What is the difference between Net and Gross? - ProProfs Discuss
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What is the difference between Net and Gross?

Asked by E. Reyes, Last updated: Mar 02, 2020

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H. Ruby

H. Ruby

Answered Mar 17, 2020

The word gross is used to refer to the earnings derived by a business organization over a specified period. This income could be a month or a year without deducting anything from the set amount. A person who obtains a salary receives gross income as payment from the employer before deducting taxes, health insurance, and social security. In the business world, the term gross is used to refer to the amount earned upon multiplying the units sold by the company and the price of each unit. The word net is used to refer to the amount of the total. The final earnings of a company with the expenses paid are considered net income. Total sales minus costs incurred equals net income. Some examples of the expenses incurred by the organization, which are subtracted from total sales, include salaries and legal charges.
 

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