Gross Income Vs. Net Income

Front

What is Gross Income?

Back

Gross income is the total amount of money you earn before any deductions are taken out.

Front

What is Net Income?

Back

Net income is the amount of money you take home after all deductions and taxes have been subtracted from your gross income.

Front

If Angel worked 7 hours at $15 per hour, what is his gross income?

Back

Angel's gross income is $105 (7 hours x $15/hour).

Front

What are deductions?

Back

Deductions are amounts of money that are subtracted from your gross income, such as taxes and insurance.

Front

How do you calculate Net Income?

Back

Net Income = Gross Income - Total Deductions.

Front

If David's gross income is $127.25 and his deductions are $25.20, what is his net pay?

Back

David's net pay is $102.05.

Front

What is the total amount of Marco's deductions if he has Federal Income tax: $44, Social Security tax: $23, Medicare tax: $5, and Health Insurance: $24?

Back

Marco's total deductions are $96.

Front

True or False: Gross income is the amount an employee is paid after deductions and taxes.

Back

False. Gross income is the amount an employee earns before deductions.

Front

True or False: Net income is the total amount of money you earn before deductions are applied.

Back

False. Net income is the amount you earn after deductions.

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 you actually take home after deductions.