The Difference Between Gross and Net Income

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Gross income and net income aren’t just terms for accountants and other finance professionals to understand. As it turns out, knowing the ins and outs of gross and net income can help you in a variety of ways. When you understand the differences between these concepts and how they relate to your money, you’ll be better equipped to evaluate your financial situation and plan your spending and saving strategies.

When it’s time to draft a budget or start setting financial goals for your future, understanding how gross income and net income work — along with the differences between them — is vital. Take a look at the basics of these types of income to get started.