Gross refers to the total and Net refers to the part of the total that really matters. For example, net income for a business is the profit after all expenses, overheads, taxes and interest payments are deducted from the gross income. Similarly, gross Weight refers to the total weight of the goods and the container and packaging. On the other hand, net weight refers to only the weight of the goods in question. For most food products, manufacturers print the net weight on the packaging for the benefit of consumers.
|Meaning||The term gross refers to the total amount made as a result of some activity. It can refer to things such as total profit or total sales.||Net (or Nett) refers to the amount left over after all deductions are made. Once the net value is attained, nothing further is subtracted. The net value is not allowed to be made lower.|
|Taxation||Salaried people now pay income-tax on their gross income as per Income-Tax Act of 1961.||Businesses and self-employed persons pay tax on their net income as per Income-Tax Act of 1961.|
|Gross vs Net Income||Gross income is calculated by subtracting the cost of goods sold from revenue.||Net income is calculated by subtracting expenses such as SG&A (selling, general and administrative expenses), interest payments and taxes from gross income.|
|Gross vs Net Margin||Gross margin = Gross income as a percentage of revenue||Net margin = Net income as a percentage of revenue|
|Gross vs Net Weight||In the context of weight, gross refers to the weight of the product and the packaging.||In the context of weight, net refers to the weight of the actual product (without the packaging).|
Gross vs. Net in Economics
In economics, "gross" means before deductions, e.g., Gross Domestic Product (GDP) refers to the total market value of all final goods and services produced within a country, in a given period of time, usually a calendar year. Net Domestic Product (NDP) refers to the Gross Domestic Product (GDP), minus depreciation on a country's capital (economic) goods. (The NDP is thus, in effect, an estimate of how much the country has to spend to maintain its current GDP.)
Gross vs. Net in Accounting
Gross vs. Net Income
In accounting, for a P&L (Profit and Loss) statement, gross profit, or gross income, or gross operating profit, is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments. Net profit is equal to the gross profit, minus overheads, minus interest payable, plus one-off items for a given time period.
Gross Margin vs Net Margin
Gross margin is the ratio of gross profit to revenue. Net margin is the ratio of net profit to revenue.