What does 'net income' mean?

Net income, also sometimes called take-home pay or net pay is gross income minus any deductions and withholdings from your paycheck. These deductions might include federal income tax, a retirement or pension account, and social security. Net income is the amount of money that goes into your bank account unless you cash your check instead.

What's the difference between gross vs. net income?

The difference between gross income and net income are explained in the points below: Gross income is the total of all the receipts less expenses, which an individual or a company generates during the financial year. ... Gross Income includes all the amount that you make whereas Net Income includes all the amount that you keep. Gross income is always higher than the Net income. ... While gross income does not depend on net income. ...

What does net income exactly consist of?

What Is Net Income (NI)? Net income (NI), also called net earnings, is calculated as sales minus cost of goods sold, selling, general and administrative expenses, operating expenses, depreciation, interest, taxes, and other expenses. It is a useful number for investors to assess how much revenue exceeds the expenses of an organization.