Gross vs net income

Front

What is the amount earned before taxes and deductions called?

Back

Gross income.

Front

What type of income includes taxes and deductions?

Back

Net income.

Front

How is net income calculated?

Back

By subtracting taxes and deductions from gross income.

Front

What is the total amount before income and payroll taxes are deducted?

Back

Gross income.

Front

What amount is typically used for budgeting purposes?

Back

Net income.

Front

What is the difference between gross and net income?

Back

Gross income is the total earnings before deductions, while net income is what remains after deductions.

Front

If a person earns $50,000 and pays $10,000 in taxes, what is their net income?

Back

$40,000.

Front

What does gross income represent in a paycheck?

Back

The total earnings before any deductions.

Front

Why is net income important for budgeting?

Back

It represents the actual amount available to spend after taxes and deductions.

Front

Can gross income be higher than net income?

Back

Yes, gross income is always higher than net income due to deductions.