Gross vs. Net
We all have considered the gross and net salary from our jobs, isn’t it? But what do these two words actually mean? And where do we use them correctly? We know that Net is a different thing like fishing net or mosquito net. But when it comes to money, we are a bit clueless.
Well, in this post, I will be tackling this problem and tell you all about it.
Let’s get started.
|Gross earnings means the total earnings brought in without any deduction.||Net means the amount you will get in hand after everything|
|E.g., The gross salary cannot show you the whole picture.||E.g., What can be the net resale value of this product?|
What does Net Mean?
Net is actually a noun, verb, and adjective which has multiple meanings. For noun, it can be a mesh-like material which you can see in a tennis court, or use to protect yourself against bugs, or even to catch something.
When used as a very, it can mean to catch something. But when it comes to money and numbers, it’s a bit different. This is where it is different from the word “gross”.
Here, this word refers to profit as opposed to gross. When used as an adjective, it also can mean the remaining after deductions, as for charges or expenses. Or, for business, it can mean the selling price with all parts and charges included and with all deductions having been made.
To put it simply, net means the amount you will get in hand after everything.
- My net salary is much less than that of James.
- The net profit last year was better than this year.
- What can be the net resale value of this product?
What does Gross Mean?
Just like the opposite of Net, Gross can be used as an adjective and it means without deductions; total, as the amount of profit, sales, salary, etc. Gross amount is always without any expenses or taxes.
When used as noun it means the total income from sales, or salary before any deductions. It gives you the big picture of what you have made.
If used as a verb it can mean to make, have, or earn as a whole before any deductions, as of expenses, or taxes.
The word comes from the Old French word “gros” which means “large”.
- The gross amount is good but we have to wait for the net return.
- The gross salary cannot show you the whole picture.
- Don’t judge the profit margin completely based on gross earnings.
How to Use Each Word?
It is true that both these words refer to your profit or income, but they cannot be treated as synonyms and have a clear distinction. Knowing this can be very important if you make that money.
Now, always remember that the gross profit will likely be higher than your net profit but at the end of the day, Net is what you get in hand.
This is because gross earnings indicate the total amount brought in and doesn’t include the money needed to be spent along the way or fees that have to be deducted.
So, there you have it. The difference between “gross” and “net”. Let us know if you have any other queries.