Gross and Net Income

Front

What is Gross Income?

Back

Gross Income is the total amount of money earned from a job before any deductions like taxes and insurance are taken out.

Front

What is Net Income?

Back

Net Income is the amount of money a person takes home after all deductions, such as taxes and insurance, have been subtracted from Gross Income.

Front

If Jennifer earns $4,500 a month and takes home $3,700, what is her Net Income?

Back

$3,700.

Front

What does it mean to withhold money from a paycheck?

Back

Withholding money means that an employer takes out a certain amount from an employee's earnings for taxes and other deductions before the employee receives their paycheck.

Front

If Jaida earns $1,500 and has $400 deducted, what is her Gross Income?

Back

$1,500.

Front

What is the formula to calculate Net Income?

Back

Net Income = Gross Income - Total Deductions.

Front

If Mrs. Barakat earned $7,800 but received $5,850, what were her total deductions?

Back

$1,950.

Front

What is the difference between Gross Income and Net Income?

Back

Gross Income is the total earnings before deductions, while Net Income is what remains after deductions.

Front

If Mr. Keen earned $8,100 and received $5,994, how much was withheld for taxes and deductions?

Back

$2,106.

Front

Why is it important to understand Gross and Net Income?

Back

Understanding Gross and Net Income helps individuals manage their finances and know how much money they actually take home.