net income

noun

1. the excess of revenues and gains of a business over expenses and losses during a given period of time.

Word History and Origins

Origin of net income¹

First recorded in 1760–70

Example Sentences

The study notes that there “continues to be wide variation in financial performance among hospitals, with the bottom quartile showing a net income margin of -5%, compared to +13% for the top quartile.”

From Los Angeles Times

Demand was so high that one manufacturer near Osaka, called Glory, saw its net income triple, according to an annual report.

From New York Times

Semiconductor related issues were boosted by news that Nvidia’s profit skyrocketed above forecasts, with quarterly net income climbing more than sevenfold from a year earlier to $14.88 billion.

From Seattle Times

The company beat Wall Street’s estimates on revenue, subscriber additions and net income, according to FactSet.

From Los Angeles Times

It also generated $2.3 billion in net income and its revenue was $9.3 billion, 15 percent higher compared with the same time last year.

From New York Times

More About Net Income

What is net income?

Net income is the amount of revenue remaining after all expenses, taxes, and other costs are paid. In comparison, gross income is the amount of revenue before any costs are paid.

Net income is used in relation to both an individual’s earnings and a business’s earnings. 

As an individual, your income is the amount of money you’re paid for work you do, such as from an employee position or from projects you complete as a freelancer. It can also be money you earn in other ways, such as with renting an apartment or investing in the stock market. Your gross income is the total amount you earn before taxes, expenses, and other costs are paid. Your net income is the amount you receive after paying those costs. If you work an employee position, for example, your net income is the amount of money you receive each pay period, after taxes, retirement savings, health insurance, and other costs are paid.

A business’s income usually comes from the sale of goods or services. As with individuals, a business’s gross income is the total amount earned before any costs are paid. Its net income is the revenue remaining after the costs for materials and labor, taxes, and other expenses are paid. For example, a bookstore would earn income from the sale of books and other items. Its costs would include the books it sells, employee wages, rent for the store space, bags to put sold books in, and so on. Its net income is its gross income minus all its costs.

Example: Sandy’s net income was less than they expected because their health insurance cost was so high.

Where does net income come from?

The first records of the term net income come from around the 1760s. It combines the terms net, meaning “remaining after deductions,” and income, meaning “revenue received for goods and services.”

Did you know ... ?

What are some synonyms for net income?

• take-home pay
• net earnings
• net wages
• net pay

What are some words that share a root or word element with net income? 

• net profit
• net present value
• gross income
• income distribution
• income account

What are some words that often get used in discussing net income?

• business
• expenses
• paycheck
• sales
• taxes

What are some words net income may be commonly confused with?

• gross income

How is net income used in real life?

Net income is almost always used in reference to an individual’s or business’s earnings after expenses, taxes, and other costs are deducted.

Since its IPO in 1997, Amazon has made $30 billion in cumulative net income.

Apple has made $36 billion in net income in its last 2 quarters.$AMZN $AAPL

— Charlie Bilello (@charliebilello) January 30, 2020

African Development Bank's net income continues to grow solidly. We moved from $492.7 million in 2015, when I took over, to $556.6 million in 2016 and $855 million in 2017, an increase of almost 54% over 2016. And 73% increase over where we were 2015. Our future looks brighter!

— Akinwumi A. Adesina (@akin_adesina) February 18, 2018

– Create a cash reserve
– Save 20% net income every month
– Reduce/eliminate debt on liabilities
– Study financial literacy
– Use spare time to learn new skills
– Learn to say “NO” & not feel guilty
– Do more of what makes you happy
– Intake less sugar
– Sleep more

— Reece Wabara (@ReeceWabara) December 24, 2019

 

 

Try using net income!

Is net income used correctly in the following sentence?

“Before Phil took the new job, he calculated what his net income before taxes would be.”