Jun 16

What is the difference between gross income and net income?

Gross Income is how much money you make before any deductions have been taken out of your wage.  For example, If you earn $11/hr and worked 40 hrs your check should be $440.  But is your check ever the full anount?  No, because you do not receive your gross income you receive your net income.

Net Income is your paycheck after deductions have been taken out.  Most commonly, Federal and State taxes are taken out of your paycheck.  There are a number of other deductions that can be taken out of your gross income such as retirement or stock payments, insurance premiums and others.

The bottom line is gross income is a total income of ones earnings and net income is what you actually get after taxes and other deductions.