How to Calculate Net Profit

What is Net profit and how do you calculate it? Net profit is your total income minus all expenses.

Step #1 - Work out your Gross profit. Which is your revenue minus costs of goods sold.

Step #2 - Take your gross profit and deduct your operating expenses, things like payroll, rent, insurance, utilities and so on.

Step #3
Deduct tax.

This figure is your Net profit, also known as your bottom line.

Net Profit = Gross Profit - Costs of Goods Sold - Expenses - Tax

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These videos are intended as a general guide only. Please consider what is best for your business. If you require further information specific to your business needs, please speak to your professional advisor/s

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