Gross Yield

DEFINITION of 'Gross Yield'

The yield on an investment before the deduction of taxes and expenses. Gross yield is expressed in percentage terms. It is calculated as the annual return on an investment prior to taxes and expenses divided by the current price of the investment.

BREAKING DOWN 'Gross Yield'

For example, a stock that pays $3 in annual dividends and is currently trading at $60 has a gross (dividend) yield of 5.0%. If there is a withholding tax of 10% on the dividend payments, the net dividend yield would be 4.5%. In the case of property investments, the difference between gross and net yields can be quite significant, since rental income can be substantially eroded by operating expenses such as maintenance expenditures, insurance and property taxes.

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