Whether you’re running your own business or working for someone else, certain metrics are key to understanding how you’re doing financially. Net income and gross income are two numbers that can help you evaluate your business or personal finances. Various people and organizations might need to know your gross income—from your landlord to your accountant. You’ll need to know your gross income if you’re applying for a car loan, filling out your tax return, or getting a mortgage.
Gross income refers to the total amount of revenue you or a business receives in a given year (minus a few specific expenses). Net income, on the other hand, is the amount of income left over after all expenses are factored in. Before you make a plan for your budget, your business or your investments, let’s take a closer look at these two important terms.
What is Gross Income?