Gross vs. Net Income

Front

What is Gross Income?

Back

Total income before taxes and deductions are taken out.

Front

What is Net Income?

Back

The amount of money you take home after taxes and deductions are subtracted from your gross income.

Front

Why was Katie's paycheck lower than expected?

Back

Katie's paycheck was lower because taxes were deducted.

Front

What are deductions?

Back

Money taken out of your income, such as taxes.

Front

If Kristin earns a gross income of $250 and has $55 in deductions, what is her net income?

Back

$195

Front

What type of tax did Curtis pay when buying jeans?

Back

Sales Tax.

Front

What is an example of a deduction?

Back

Income tax or payroll tax.

Front

How do you calculate Net Income?

Back

Net Income = Gross Income - Total Deductions.

Front

What is the purpose of taxes?

Back

To fund government services and programs.

Front

What happens to your Gross Income after deductions?

Back

It becomes your Net Income.