The difference between gross and net, in economic or accounting terms, is that the raw indices refer to total amounts that have not been subtracted or discounted. While the net indices are the result of said subtractions.
In other words, an index or net quantity is the result of discounts applied to a gross quantity.
These concepts are key to understanding and managing salaries, benefits, product weights, among other indices.
| Stupid | grandson | |
|---|---|---|
| Definition | Amount or total value for which no withholding has been made. | Amount or gross value to which a withholding or discount has been applied. |
| Salary | Total amount of money that a worker will receive. | Amount of real money that a worker will receive after withholdings have been applied. |
| Benefit | Monetary margin obtained after subtracting the cost of a product from its selling price. | Gross profit after subtracting fixed expenses. |
| Weight | Weight of a product including the weight of the container that contains it. | Weight of the product without the container. |
| Internal product | Amount of money generated by a country as a result of the export of its goods. | Gross domestic product after subtracting costs of production. |
| Price | Selling price of a product. | Final price paid by the consumer. |
Index
Gross salary and net salary
The gross salary refers to the total amount of money that the worker will receive. This includes your basic salary and all benefits that correspond to you according to the labor laws of your country and those provided by the company on its own initiative.
Gross pay, then, includes bonuses, overtime, social benefits, and any other type of compensation or benefit.
For its part, the net salary is the amount of money that the worker receives once his salary has been recalculated, based on the withholdings that correspond according to the legislation and internal labor agreements with the company.
The net salary is the gross salary from which the mandatory contributions to social security, taxes, loans made by the company (if applicable), etc. have been subtracted.
See also Difference between salary and salary
Gross profit and net profit
Gross profit is the margin of money that a company or person obtains after carrying out a profit-generating activity.
In this case, profit is what is left by subtracting the cost of producing a good or service from the selling price.
If the profit is negative (that is, if the cost of producing a product is higher than its selling price), it means that there is no profit margin. Therefore, it is necessary to review the business model or the costs associated with the production of the product.
Instead, the net profit is the margin of money that the company has left after applying a series of discounts to the gross profit.
To calculate it, it is necessary to subtract all taxes, depreciation, interest, expenses (including wages and salaries) from the gross profit.
Net profit is an indicator of the profitability of the product or service, which is why it is an essential calculation in the business world.
See also Difference between cost and expense.
Gross weight and net weight
It is the weight of a product taking into account the tare weight, that is, the weight of the container that contains it (can, bottle, box, container, etc.).
The net weight , on the other hand, is the weight of the product without including the weight of its container or tare weight.
See also Difference between mass and weight.
Gross domestic product and net domestic product
It is the total monetary value of the country’s production of goods and services, during a given period (quarter, semester, year).
It should be noted that the gross domestic product does not consider the goods and services used as raw materials or to satisfy domestic demand, but only those that have been exported to a third party.
The net domestic product is the gross domestic product, from which the costs of raw materials, services and depreciations have been discounted.
This calculation allows knowing the value of the products and services generated by a country in a period of time.
Gross price and net price
It is the designated price for the sale of a product or service. To calculate it, production costs and expected profit are included.
The net price is the one paid by the final consumer, which includes taxes (VAT, for example, in the countries that apply).
As the net price will be higher than the gross price, this quantitative indicator is considered an exceptional case with respect to those previously mentioned.
