ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Net salary is the total salary one gets after all the mandatory deductions such as taxes that are made from the total gross salary. This is the total amount that gets credited to the bank account of the employee after all the deductions are done.

Detailed explanation-2: -Gross pay is how much employees earn before taxes and other withholdings, whereas net pay is the amount of money employees actually take home after all payroll deductions. For example, if an employee makes $8, 000 gross per month and has $1, 700 deducted for taxes and benefits, that individual’s net pay would be $6, 300.

Detailed explanation-3: -To calculate net income after taxes (NIAT), take gross sales revenue and subtract the cost of goods sold. Then subtract business expenses, depreciation, interest, amortization and taxes. Whatever’s left is the NIAT.

Detailed explanation-4: -After-tax income refers to the net income after deducting all applicable taxes. Therefore, the after-tax income is simply one’s gross income minus taxes. For individuals and corporations, the after-tax income deducts all taxes, which include federal, provincial, state, and withholding taxes.

Detailed explanation-5: -In commerce, net income is what the business has left over after all expenses, including salary and wages, cost of goods or raw material and taxes. For an individual, net income is the “take-home” money after deductions for taxes, health insurance and retirement contributions.