Gross

Gross, in a financial context used across banking, describes a total figure calculated before any deductions, such as taxes, expenses, fees, or costs, are subtracted from it. The term appears across many areas of finance and accounting: gross income is earnings before tax and other deductions, gross profit is revenue minus only the direct cost of producing goods or services sold, and gross weight in shipping and logistics includes the weight of packaging alongside the actual goods. In every case, "gross" signals that the figure is a starting point, not the final, usable amount.

The opposite of gross is "net," which refers to the amount left after the relevant deductions have been applied. Understanding whether a quoted financial figure is gross or net is essential to interpreting it correctly, since the gap between the two can be substantial, particularly for income and profit figures where taxes, deductions, and costs can consume a significant share of the gross amount.

If gross pay is the total amount an employer agrees to pay an employee for their work, and net pay is what actually lands in the employee's bank account after taxes and other withholdings are taken out, the difference between the two numbers is exactly the deductions that disappeared along the way. Almost every "gross" figure in finance works the same way: it is the number before the usual subtractions are applied, which is why a gross figure is often noticeably larger, and sometimes misleadingly larger, than the number that actually matters for budgeting or spending purposes.

• Gross income: total earnings before income tax, social security contributions, and other payroll deductions.
• Gross profit: a company's revenue minus the direct cost of goods sold, before operating expenses, interest, and taxes are subtracted.
• Gross domestic product (GDP): the total value of goods and services produced in an economy, a macroeconomic rather than personal finance measure, but built on the same "before deductions" logic applied at a national level.
• Gross rental yield: a property's annual rental income as a percentage of its purchase price, before deducting costs such as maintenance, taxes, and vacancies.

Because gross figures are always larger than the corresponding net figures, they are sometimes used, intentionally or not, in a way that overstates how much money is actually available or earned, such as a job offer emphasizing a large gross salary without clearly showing the much smaller net pay after taxes, or a rental property advertisement citing an attractive gross yield that looks far less appealing once operating costs are factored in. Comparing figures on a like-for-like basis, gross to gross or net to net, is essential whenever evaluating two financial options against each other.

Lenders frequently use a borrower's gross income, rather than net income, as the starting point for calculating affordability ratios during underwriting, since gross income provides a more stable and standardized basis for comparison across borrowers whose tax situations, benefit deductions, and withholding elections can otherwise vary considerably. A borrower reviewing a loan offer based on gross income figures should remember that their actual day-to-day spending power is governed by net income, which is why personal budgeting is generally built around net, take-home figures even when a lender's underwriting calculations are built around gross ones.

On a company's income statement, gross profit sits near the top, immediately below revenue, and is followed by a series of further deductions, operating expenses, interest, and taxes, each of which narrows the figure further until it reaches net income at the very bottom of the statement. Analysts specifically track the gross profit margin, gross profit as a percentage of revenue, as an early signal of how efficiently a company produces what it sells, before the separate question of how well it controls its broader operating costs is addressed further down the same statement.

• Consumer Financial Protection Bureau