Gross Income Definition

Gross Income Definition

Gross income is the total of all revenue coming into your business minus the cost of goods sold or COGS (with some exceptions according to the IRS rulings and the U.S. Code). The amount of gross income is the same amount as gross profit and gross margin.

Extended Definition
Gross income is computed before you can determine the amount of taxable income. Although the COGS is deducted from the total revenue when computing gross income, operating expenses like rent or insurance are not deducted.

When comparing two similar companies, gross income can be useful in recognizing which business is optimizing profitability with regard to expenses.

Related Articles
What is Gross Income?
What is Gross Profit?
Your Small Business Needs a Profit and Loss Statement!
What is Gross Margin?

Last Updated By

Patriot Software | Sep 28, 2015

Check out Our Accounting Software

See a Demo

Back to Top