Gross income and net income are both measures of how much money you earn, but they represent different stages of that money.

Gross income is the total amount you earn before any deductions.
This includes your salary, wages, bonuses, and any other income sources—basically the full amount your employer pays you.

Net income is what you actually take home after deductions.
These deductions can include taxes, insurance, retirement contributions, and other withholdings.

A simple way to think about it:

• Gross income = total earnings
• Net income = gross income − deductions

Example:
If you earn $3,000 a month (gross), and $800 is taken out for taxes and other deductions, your net income is $2,200.

So, gross shows your full earning power, while net shows what you can actually spend or save.