Net Income Calculator: Easily Determine Your Individual or Business Earnings

How to use the tool

1 . Select your profile

• Individual – personal salary, freelance or pension income.
• Business – company revenue, including sole proprietorships and LLCs.

2 . Enter the fields

For individuals

• Gross Income: Total pay before anything is withheld. Examples – 82 000 or 94 500.
• Deductions: 401(k), HSA, insurance, etc. Examples – 8 000 or 11 200.
• Taxes: Federal, state, FICA. Examples – 19 000 or 23 700.

For businesses

• Total Revenue: Sales or service income. Examples – 920 000 or 1 150 000.
• COGS: Direct production costs. Examples – 410 000 or 520 000.
• Operating Expenses: Rent, payroll, utilities. Examples – 230 000 or 305 000.
• Interest Expenses: Debt servicing. Examples – 15 000 or 27 000.
• Taxes: Corporate or pass-through. Examples – 45 000 or 62 000.

3 . Apply the formulas

Individual

$$\text{Net Income}= \text{Gross Income} – \text{Deductions} – \text{Taxes}$$

Business

$$\text{Net Income}= \text{Total Revenue} – \text{COGS} – \text{Operating Expenses} – \text{Interest Expenses} – \text{Taxes}$$

4 . Example calculations

• Individual: 82 000 − 8 000 − 19 000 = 55 000.
• Business: 920 000 − 410 000 − 230 000 − 15 000 − 45 000 = 220 000.

5 . Interpret the result

Use the net figure for budgeting, pricing, tax planning or loan applications.

Quick-Facts

• Average U.S. effective individual tax rate – 13.6 % (IRS SOI Table 1, 2023).
• Federal corporate rate – 21 % since 2018 (Internal Revenue Code §11).
• Median net profit margin across U.S. industries – 7.7 % (NYU Stern “Margins by Sector”, 2023).
• Self-employment tax rate – 15.3 % on net earnings (IRS Pub 334, 2023).
• 401(k) elective deferral limit – 22 500 USD for 2023 (IRS Notice 2022-55).

FAQ

What is net income?

Net income is the money remaining after you deduct all allowable expenses and taxes from total income; accountants call it the “bottom line” (FASB Conceptual Framework, 2021).

How does the calculator adjust for individuals versus businesses?

It switches input fields: individuals subtract deductions and payroll taxes, while businesses also subtract COGS, operating and interest costs, aligning with GAAP income-statement structure (SEC Regulation S-X, §210).

Why should I track net income?

Net income drives budgeting, investment capacity and credit scoring; lenders evaluate debt-to-income ratios using this figure (Consumer Financial Protection Bureau, 2022).

How accurate is the result?

The calculator is precise to two decimals; accuracy depends on your input accuracy and excludes future tax credits or deferred items (IRS Pub 17, 2023).

What is a healthy net profit margin for a small business?

Many analysts view 10 % as robust, but sector medians range from 2 % in retail to 25 % in software (NYU Stern “Margins by Sector”, 2023).

How do pre-tax deductions affect take-home pay?

Each pre-tax dollar reduces taxable income, saving both income and payroll taxes; a 401(k) deferral can cut combined taxes by up to 37 % for high earners (IRS Tax Brackets, 2023).

Can freelancers use this tool?

Yes. Enter gross receipts as revenue, business expenses—including the 15.3 % self-employment tax—then review net income for quarterly estimated payments (IRS Form 1040-ES, 2023).

How does net income influence loan approvals?

Lenders prefer a debt-to-income ratio below 36 %; higher net income lowers the ratio and improves approval odds (FHFA Single-Family Underwriting Standards, 2023).