Have you ever wondered why your paycheck isn't as big as the number your boss tells you? That's because of the difference between gross and net income! Gross income is the money you earn before taxes and other deductions. Net income is what you actually get to keep after everything is taken out.
- Gross income is your total earnings before taxes.
- Net income is what's left after taxes and other things are subtracted.
- It's important to use your net income when you make a budget, so you don't spend more than you have.
| Income Type | Description |
|---|---|
| Gross Income | Total money earned before deductions |
| Net Income | Money left after taxes and deductions; your take-home pay |
