Gross Earnings

What are 'Gross Earnings'

Gross earnings, for individuals, refer to the total income earned in a year, as calculated prior to any tax deductions or adjustments.

2. For public companies, gross earnings is an accounting convention, referring to the amount of initial profit left over from total revenues for a specified time period, once cost of goods sold have been deducted.

BREAKING DOWN 'Gross Earnings'

1. For example, consider John who earned a total of $50,000 for the recently completed fiscal year, and made $5,000 of contributions to a government-sponsored savings plan. Because his contributions reduce his taxable earnings, John is allowed to base his tax calculations off taxable earnings of $45,000, while his actual gross earnings for the year are $50,000.

2. A company's gross earnings are reported periodically on its income statement. The first line of the income statement reports a company's total sales for a given time period. When cost of goods sold (COGS) is subtracted from this number, the remaining difference is referred to as the company's gross earnings.

RELATED TERMS
  1. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
  2. Deduction

    Any item or expenditure subtracted from gross income to reduce ...
  3. Gross Receipts

    A tax term relating to the total business revenue from services ...
  4. Accounting Earnings

    The amount of money a company has earned during a given period, ...
  5. Itemized Deduction

    A deduction from a taxpayer's taxable adjusted gross income that ...
  6. Gross Yield

    The yield on an investment before the deduction of taxes and ...
Related Articles
  1. Taxes

    What is Gross Income?

    Gross income is an individual’s total income before taxes and other adjustments are considered.
  2. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  3. Economics

    What are Earnings?

    The amount of profit that a company produces during a specific period, which is usually defined as a quarter (three calendar months) or a year.
  4. Economics

    Understanding Gross Sales

    Gross sales represents the overall revenue of a company through its sales activities.
  5. Markets

    Fundamental Analysis: The Income Statement

    By Ben McClureThe income statement is basically the first financial statement you will come across in an annual report or quarterly Securities And Exchange Commission (SEC) filing. It also contains ...
  6. Taxes

    An Overview Of Itemized Deductions

    Not taking the standard deduction this year could save you hundreds of dollars.
  7. Term

    The Difference Between Gross and Net Profit Margin

    To calculate gross profit margin, subtract the cost of goods sold from a company’s revenue; then divide by revenue.
  8. Term

    Gross, Operating and Net Profit Margins

    A company’s income statement includes the company’s gross, operating and net profits.
  9. Insurance

    Everything Investors Need To Know About Earnings

    We go over the concepts behind the excitement over the most important figure in the stock market.
  10. Investing

    Earnings: Quality Means Everything

    It's quantity that generates all the hype, but there are more meaningful factors that gauge true performance.
RELATED FAQS
  1. What is the difference between gross income and earned income?

    Being able to distinguish between earned income and gross income is an important tool in preparing for and filing your individual ... Read Answer >>
  2. Are gross sales and taxable gross sales the same thing?

    Learn the difference between gross sales and taxable gross sales and how these terms relate to the profit and tax liability ... Read Answer >>
  3. What is the difference between gross income and taxable income?

    Understanding common tax terms including gross income and taxable income can help individuals navigate tax accounting in ... Read Answer >>
  4. What are the differences among gross income, adjusted gross income and modified adjusted ...

    Discover how calculating total taxable income is easier when gross income, adjusted gross income and modified adjusted gross ... Read Answer >>
  5. What is the difference between AGI (adjusted gross income) and gross income?

    Find out the differences between your annual gross income and your adjusted gross income, or AGI, both of which are calculated ... Read Answer >>
  6. What is the difference between gross margin and gross profit?

    Understand the difference in definitions between gross margin and gross profit, and learn what each represents as a metric ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center