Net income is the “bottom line” of the income statement – the profit available to shareholders. For individuals, net income usually means take-home pay after tax.
How to use the Net Income Calculator
- Revenue
- Cost of goods sold
- Operating expenses
- Interest expense
- Other income (+) or expenses (−)
- Tax rate
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter revenue, COGS, operating expenses, interest, other income and taxes.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Revenue | Amount in your currency |
| Cost of goods sold | Amount in your currency |
| Operating expenses | Amount in your currency |
| Interest expense | Amount in your currency |
| Other income (+) or expenses (−) | Amount in your currency |
| Tax rate | In % |
What each result means
- Gross profit = [Revenue] – [Cost of goods sold]
- Operating income = [Gross profit] – [Operating expenses]
- Earnings before tax = [Operating income] – [Interest expense] + [Other income (+) or expenses (−)]
- Taxes = max([Earnings before tax], 0)×[Tax rate]÷100
- Net income = [Earnings before tax] – [Taxes]
- Net margin = [Net income]÷[Revenue]×100
Example values
How the main result changes when Revenue changes and everything else stays at the example values above:
| Revenue | Net income |
|---|---|
| 500,000 | -325,000 |
| 750,000 | -75,000 |
| 1,000,000 | 138,250 |
| 1,250,000 | 335,750 |
| 1,500,000 | 533,250 |
| 2,000,000 | 928,250 |
Formula
Gross profit = revenue − COGSOperating income = gross profit − operating expensesNet income = operating income − interest − taxes (+ other income)Worked example
Inputs — Revenue: $1,000,000; Cost of goods sold: $550,000; Operating expenses: $250,000; Interest expense: $30,000; Other income (+) or expenses (−): $5,000; Tax rate: 21 %.
Results — Gross profit = $450,000.00; Operating income = $200,000.00; Earnings before tax = $175,000.00; Taxes = $36,750.00; Net income = $138,250.00; Net margin = 13.83 %.
Frequently asked questions
What is net income?
Revenue minus all expenses, interest and taxes.
Is net income the same as profit?
It's the final profit figure, after everything.
Is net income the same as cash flow?
No – non-cash items and working capital make them differ.
What formula does the Net Income Calculator use?
Gross profit = revenue − COGS.