{"id":72882,"date":"2026-08-28T12:01:10","date_gmt":"2026-08-28T10:01:10","guid":{"rendered":"https:\/\/www.sage.com\/en-za\/blog\/?p=72882"},"modified":"2026-09-02T13:53:23","modified_gmt":"2026-09-02T11:53:23","slug":"net-income-formula","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-za\/blog\/net-income-formula\/","title":{"rendered":"How to calculate Net Income (NI): formula and guide"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--standard entry-header--has-illustration entry-header--has-illustration--standard\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-za\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tHow to calculate Net Income (NI): formula and guide\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\tNet income is the profit left after a business subtracts all its expenses from total revenue. Learn the formula, see worked examples in rand, and compare net income with gross income, EBIT, and EBITDA.\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2026-08-28T12:01:10+02:00\">August 28, 2026<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"How to calculate Net Income (NI): formula and guide\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-za\/blog\/net-income-formula\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-za\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/what-is-net-income\" target=\"_blank\" rel=\"noreferrer noopener\">Net income<\/a> is the profit left after you subtract all business expenses from total revenue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It shows whether your business made a profit or a loss over a specific period and appears at the bottom of the income statement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can calculate it using total revenue minus total expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Revenue alone does not show whether your business is profitable.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Costs such as the cost of goods sold, wages, software subscriptions, interest, and tax must also be included.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This guide explains the net income formula, works through practical examples in rand, and compares net income with other measures of financial performance.<\/p>\n\n\n\n<section class=\"wp-block-sage-container is-constrained\"><div class=\"sage-container__inner\">\n<h3 id=\"h-key-takeaways\" class=\"wp-block-heading\">Key takeaways<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Net income is the profit remaining after you subtract all business expenses,<\/strong> including cost of goods sold, operating costs, interest, and tax, from total revenue.<\/li>\n\n\n\n<li><strong>The basic formula is<\/strong> Total revenue &#8211; Total expenses = Net income.<\/li>\n\n\n\n<li><strong>Net income appears at the bottom of the income statement<\/strong>, which is why it is often called the bottom line.<\/li>\n\n\n\n<li><strong>Net income is different from<\/strong> gross income, <a href=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/what-is-operating-income\" target=\"_blank\" rel=\"noreferrer noopener\">operating income<\/a>, earnings before interest and taxes (EBIT), and earnings before interest, taxes, depreciation, and amortisation (EBITDA).<\/li>\n\n\n\n<li><strong>Net income does not equal <a href=\"https:\/\/www.sage.com\/en-za\/blog\/cash-flow-vs-profit\" target=\"_blank\" rel=\"noreferrer noopener\">cash flow<\/a>, <\/strong>so use it alongside cash flow and other financial measures.<\/li>\n<\/ul>\n<\/div><\/section>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"h-here-s-what-we-ll-cover\"><strong>Here\u2019s what we\u2019ll cover:<\/strong><\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-net-income-ni\" data-level=\"2\">What is net income (NI)?<\/a><\/li><li><a href=\"#h-where-is-net-income-shown-on-an-income-statement\" data-level=\"2\">Where is net income shown on an income statement?<\/a><\/li><li><a href=\"#h-what-s-the-difference-between-net-income-and-gross-income\" data-level=\"2\">What&rsquo;s the difference between net income and gross income?<\/a><\/li><li><a href=\"#h-what-s-the-difference-between-net-income-and-operating-income\" data-level=\"2\">What&rsquo;s the difference between net income and operating income?<\/a><\/li><li><a href=\"#h-how-do-net-income-ebit-and-ebitda-differ\" data-level=\"2\">How do net income, EBIT, and EBITDA differ?<\/a><\/li><li><a href=\"#h-why-does-net-income-matter\" data-level=\"2\">Why does net income matter?<\/a><\/li><li><a href=\"#h-what-are-the-limitations-of-net-income\" data-level=\"2\">What are the limitations of net income?<\/a><\/li><li><a href=\"#h-how-can-you-track-net-income-accurately\" data-level=\"2\">How can you track net income accurately?<\/a><\/li><li><a href=\"#h-frequently-asked-questions-about-net-income\" data-level=\"2\">Frequently asked questions about Net income<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 id=\"h-what-is-net-income-ni\" class=\"wp-block-heading\">What is net income (NI)?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Net income (NI), also called net profit, net earnings, or the bottom line, is the profit remaining after you account for all business expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These expenses can include operational costs, cost of goods sold (COGS), labour, interest, and tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A positive net income means your revenue is higher than your expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A negative net income means your expenses are higher than your revenue, resulting in a net loss.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net income helps you understand overall profitability for a defined period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is not the same as the cash available in your bank account, because accounting profit and <a href=\"https:\/\/www.sage.com\/en-za\/blog\/cash-flow-vs-profit\" target=\"_blank\" rel=\"noreferrer noopener\">cash flow measure different things<\/a>.<\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6ac58d4a4fd4f&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"6ac58d4a4fd4f\" class=\"wp-block-image size-large wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1440\" height=\"679\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on--pointerdown=\"actions.preloadImage\" data-wp-on--pointerenter=\"actions.preloadImageWithDelay\" data-wp-on--pointerleave=\"actions.cancelPreload\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-1-1440x679.jpg\" alt=\"Graphic image of a person dropping a coin in a giant cash register.\" class=\"wp-image-74643\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-1-1440x679.jpg 1440w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-1-768x362.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-1.jpg 1480w\" sizes=\"auto, (max-width: 1440px) 100vw, 1440px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\tdata-wp-bind--aria-label=\"state.thisImage.triggerButtonAriaLabel\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.thisImage.buttonRight\"\n\t\t\tdata-wp-style--top=\"state.thisImage.buttonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h2 id=\"h-how-do-you-calculate-net-income\" class=\"wp-block-heading\">How do you calculate net income?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The simplest way to calculate net income is to subtract total expenses from total revenue for the same accounting period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Total revenue &#8211; Total expenses = Net income<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you want to show cost of goods sold separately, use this expanded version:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Total revenue &#8211; Cost of goods sold &#8211; Other expenses = Net income<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before you calculate net income, check that your revenue and expense figures cover the same period and are complete.<\/p>\n\n\n\n<h3 id=\"h-what-do-the-terms-in-the-net-income-formula-mean\" class=\"wp-block-heading\">What do the terms in the net income formula mean?<\/h3>\n\n\n\n<h4 id=\"h-total-revenue\" class=\"wp-block-heading\">Total revenue:<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The money your business earns from selling products or services during a defined period.<\/p>\n\n\n\n<h4 id=\"h-cost-of-goods-sold-cogs\" class=\"wp-block-heading\">Cost of goods sold (COGS):<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The direct cost of producing or acquiring the goods and services you sell. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This can include raw materials, manufacturing costs, or inventory purchases.<\/p>\n\n\n\n<h4 id=\"h-total-expenses\" class=\"wp-block-heading\">Total expenses:<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">All costs incurred to run your business, including COGS, payroll, rent, utilities, office supplies, tax, interest, and bank fees.<\/p>\n\n\n\n<h4 id=\"h-gross-income\" class=\"wp-block-heading\">Gross income:<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Revenue after subtracting COGS, but before deducting operating expenses, interest, and tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/cost-goods-sold-cogs\/\" target=\"_blank\" rel=\"noreferrer noopener\">Related Sage Advice glossary: Cost of goods sold (COGS)<\/a><\/p>\n\n\n\n<h3 id=\"h-how-can-you-calculate-net-income-step-by-step\" class=\"wp-block-heading\">How can you calculate net income step by step?<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Choose the accounting period you want to review.<\/li>\n\n\n\n<li>Add up total revenue for that period.<\/li>\n\n\n\n<li>Add up COGS and all other expenses for the same period.<\/li>\n\n\n\n<li>Subtract total expenses from total revenue.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Check whether the result is a profit or a net loss and compare it with previous periods.<\/p>\n\n\n\n<h2 id=\"h-net-income-formula-example\" class=\"wp-block-heading\">Net income formula example<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A retail store records R500,000 in total revenue for the year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">COGS is R200,000. Operating expenses, including rent, salaries, utilities, and supplies, total R160,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The business also pays R11,000 in tax and R9,000 in interest.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><td><strong>Item<\/strong><\/td><td><strong>Amount<\/strong><\/td><\/tr><\/thead><tbody><tr><td>Total revenue<\/td><td>R500,000<\/td><\/tr><tr><td>COGS<\/td><td>R200,000<\/td><\/tr><tr><td>Operating expenses<\/td><td>R160,000<\/td><\/tr><tr><td>Tax<\/td><td>R11,000<\/td><\/tr><tr><td>Interest<\/td><td>R9,000<\/td><\/tr><tr><td>Total expenses<\/td><td>R380,000<\/td><\/tr><tr><td>Net income<\/td><td>R120,000<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>R500,000 &#8211; R380,000 = R120,000<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The store has a net income of R120,000 for the year after subtracting all expenses from revenue.<\/p>\n\n\n\n<h2 id=\"h-where-is-net-income-shown-on-an-income-statement\" class=\"wp-block-heading\">Where is net income shown on an income statement?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Net income appears at the bottom of the <a href=\"https:\/\/www.sage.com\/en-za\/blog\/income-statement-template\" target=\"_blank\" rel=\"noreferrer noopener\">income statement<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The statement starts with revenue and then subtracts COGS and other expense categories to show how revenue becomes profit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This position gives net income its other common name: the bottom line.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.sage.com\/en-za\/blog\/income-statement-template\/\">Related Sage Advice guide: Income statement template<\/a><\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6ac58d4a514c3&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"6ac58d4a514c3\" class=\"wp-block-image size-large wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1115\" height=\"810\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on--pointerdown=\"actions.preloadImage\" data-wp-on--pointerenter=\"actions.preloadImageWithDelay\" data-wp-on--pointerleave=\"actions.cancelPreload\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-2-1115x810.jpg\" alt=\"Example of net income on an income statement.\" class=\"wp-image-74644\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-2-1115x810.jpg 1115w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-2-768x558.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-2.jpg 1159w\" sizes=\"auto, (max-width: 1115px) 100vw, 1115px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\tdata-wp-bind--aria-label=\"state.thisImage.triggerButtonAriaLabel\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.thisImage.buttonRight\"\n\t\t\tdata-wp-style--top=\"state.thisImage.buttonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Net income usually appears on the income statement rather than the balance sheet.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, if an income statement is unavailable, you can derive net income from the change in retained earnings, provided you also account for dividends paid during the period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Ending retained earnings &#8211; Beginning retained earnings + Dividends paid = Net income<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Find retained earnings in the equity section of the balance sheet.<\/li>\n\n\n\n<li>Subtract beginning retained earnings from ending retained earnings.<\/li>\n\n\n\n<li>Add back dividends paid during the period.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">For example, if beginning retained earnings are R300,000, ending retained earnings are R450,000, and dividends paid are R50,000:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>R450,000 &#8211; R300,000 + R50,000 = R200,000<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Based on these figures, net income for the year is R200,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The income statement remains the preferred source because it shows the revenue and expenses that produced the result.<\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6ac58d4a52099&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"6ac58d4a52099\" class=\"wp-block-image size-large wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1393\" height=\"810\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on--pointerdown=\"actions.preloadImage\" data-wp-on--pointerenter=\"actions.preloadImageWithDelay\" data-wp-on--pointerleave=\"actions.cancelPreload\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-3-1393x810.jpg\" alt=\"\" class=\"wp-image-74645\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-3-1393x810.jpg 1393w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-3-768x446.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-3.jpg 1445w\" sizes=\"auto, (max-width: 1393px) 100vw, 1393px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\tdata-wp-bind--aria-label=\"state.thisImage.triggerButtonAriaLabel\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.thisImage.buttonRight\"\n\t\t\tdata-wp-style--top=\"state.thisImage.buttonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h2 id=\"h-what-s-the-difference-between-net-income-and-gross-income\" class=\"wp-block-heading\">What\u2019s the difference between net income and gross income?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Gross income and net income measure profitability at different stages.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/what-is-gross-salary\" target=\"_blank\" rel=\"noreferrer noopener\">Gross income<\/a> shows revenue after direct production or purchasing costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net income shows what remains after all expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Gross income = Total revenue &#8211; Cost of goods sold<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Using revenue of R500,000 and COGS of R200,000, gross income is R300,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If all remaining expenses total R180,000, net income is R120,000.<\/p>\n\n\n\n<h2 id=\"h-what-s-the-difference-between-net-income-and-operating-income\" class=\"wp-block-heading\">What\u2019s the difference between net income and operating income?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/what-is-operating-income\" target=\"_blank\" rel=\"noreferrer noopener\">Operating income<\/a> measures profit from core business activities before interest and tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is calculated by subtracting operating expenses from gross income.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net income also includes non-operating items, interest, tax, and one-time costs or gains.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Operating income = Gross income &#8211; Operating expenses<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, revenue of R500,000, COGS of R200,000, and operating expenses of R150,000 produce operating income of R150,000.<\/p>\n\n\n\n<h2 id=\"h-how-do-net-income-ebit-and-ebitda-differ\" class=\"wp-block-heading\">How do net income, EBIT, and EBITDA differ?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Net income, EBIT, and EBITDA each show profitability after different costs have been included.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Reviewing them together can help you separate overall profit from operating performance.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><td><strong>Metric<\/strong><\/td><td><strong>What it includes<\/strong><\/td><td><strong>What it helps you understand<\/strong><\/td><\/tr><\/thead><tbody><tr><td>Net income<\/td><td>All operating and non-operating expenses, interest, and tax<\/td><td>Overall accounting profit after all expenses<\/td><\/tr><tr><td>EBIT<\/td><td>Operating costs, but not interest or tax<\/td><td>Profit before financing and tax<\/td><\/tr><tr><td>EBITDA<\/td><td>Operating costs, but not interest, tax, depreciation, or amortisation<\/td><td>Operating performance before selected non-cash charges<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>EBIT = Net income + Interest + Tax<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>EBITDA = EBIT + Depreciation + Amortisation<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, net income of R120,000 plus R10,000 interest and R20,000 tax gives EBIT of R150,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If depreciation and amortisation total R30,000, EBITDA is R180,000.<\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6ac58d4a53254&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"6ac58d4a53254\" class=\"wp-block-image size-large wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1440\" height=\"699\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on--pointerdown=\"actions.preloadImage\" data-wp-on--pointerenter=\"actions.preloadImageWithDelay\" data-wp-on--pointerleave=\"actions.cancelPreload\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-4-1440x699.jpg\" alt=\"Infographic of what costs are included under Net Income\" class=\"wp-image-74647\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-4-1440x699.jpg 1440w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-4-768x373.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-4.jpg 1488w\" sizes=\"auto, (max-width: 1440px) 100vw, 1440px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\tdata-wp-bind--aria-label=\"state.thisImage.triggerButtonAriaLabel\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.thisImage.buttonRight\"\n\t\t\tdata-wp-style--top=\"state.thisImage.buttonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h2 id=\"h-why-does-net-income-matter\" class=\"wp-block-heading\">Why does net income matter?<\/h2>\n\n\n\n<h3 id=\"h-shows-overall-profitability\" class=\"wp-block-heading\">Shows overall profitability<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Net income includes operating costs, financing costs, and tax, giving you a broad view of profit after expenses.<\/p>\n\n\n\n<h3 id=\"h-supports-business-decisions\" class=\"wp-block-heading\">Supports business decisions<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Tracking net income can inform decisions about spending, reinvestment, growth, and cost control.<\/p>\n\n\n\n<h3 id=\"h-helps-you-monitor-performance\" class=\"wp-block-heading\">Helps you monitor performance<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Comparing net income across consistent periods can reveal patterns and changes in profitability.<\/p>\n\n\n\n<h3 id=\"h-supports-reporting\" class=\"wp-block-heading\">Supports reporting<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Net income is reported on the income statement and forms part of financial reporting.<\/p>\n\n\n\n<h3 id=\"h-provides-context-for-stakeholders\" class=\"wp-block-heading\">Provides context for stakeholders<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investors, buyers, and lenders may review net income alongside cash flow, debt, and other measures when assessing a business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.sage.com\/en-za\/blog\/financial-reporting\/\" target=\"_blank\" rel=\"noreferrer noopener\">Related Sage Advice guide: Financial reporting<\/a><\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6ac58d4a53f6d&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"6ac58d4a53f6d\" class=\"wp-block-image size-large wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1440\" height=\"729\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on--pointerdown=\"actions.preloadImage\" data-wp-on--pointerenter=\"actions.preloadImageWithDelay\" data-wp-on--pointerleave=\"actions.cancelPreload\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-5-1440x729.jpg\" alt=\"Infographic of a person playing tennis against a wall.\" class=\"wp-image-74649\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-5-1440x729.jpg 1440w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-5-768x389.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/02\/Net-Income-Formula-Image-5.jpg 1474w\" sizes=\"auto, (max-width: 1440px) 100vw, 1440px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\tdata-wp-bind--aria-label=\"state.thisImage.triggerButtonAriaLabel\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.thisImage.buttonRight\"\n\t\t\tdata-wp-style--top=\"state.thisImage.buttonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h2 id=\"h-what-are-the-limitations-of-net-income\" class=\"wp-block-heading\">What are the limitations of net income?<\/h2>\n\n\n\n<h3 id=\"h-net-income-does-not-equal-cash-flow\" class=\"wp-block-heading\">Net income does not equal cash flow<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under accrual accounting, revenue and expenses can be recorded before cash is received or paid.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Non-cash items such as depreciation and amortisation also affect net income.<\/p>\n\n\n\n<h3 id=\"h-accounting-policies-and-estimates-affect-the-result\" class=\"wp-block-heading\">Accounting policies and estimates affect the result<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Depreciation methods, inventory valuation, expense recognition, and revenue recognition can change reported net income.<\/p>\n\n\n\n<h3 id=\"h-one-time-items-can-distort-comparisons\" class=\"wp-block-heading\">One-time items can distort comparisons<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">An asset sale or restructuring charge can increase or reduce net income for one period without reflecting normal operations.<\/p>\n\n\n\n<h3 id=\"h-it-does-not-show-operational-efficiency-on-its-own\" class=\"wp-block-heading\">It does not show operational efficiency on its own<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Gross income, operating income, and EBITDA can provide additional views of core operations.<\/p>\n\n\n\n<h3 id=\"h-it-may-not-include-uncertain-future-costs\" class=\"wp-block-heading\">It may not include uncertain future costs<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Some potential obligations are not recognised as expenses until they meet the relevant accounting requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Use net income alongside the <a href=\"https:\/\/www.sage.com\/en-za\/blog\/glossary\/cash-flow-statement\" target=\"_blank\" rel=\"noreferrer noopener\">cash flow statement<\/a>, balance sheet, and other profitability measures.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you are unsure how an accounting policy or South African tax rule affects your figures, speak to an accountant or registered tax practitioner.<\/p>\n\n\n\n<h2 id=\"h-how-can-you-track-net-income-accurately\" class=\"wp-block-heading\">How can you track net income accurately?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Record revenue and expenses consistently.<\/li>\n\n\n\n<li>Use the same accounting period when comparing figures.<\/li>\n\n\n\n<li>Reconcile bank accounts and review unusual transactions.<\/li>\n\n\n\n<li>Separate COGS, operating expenses, interest, and tax clearly.<\/li>\n\n\n\n<li>Review net income alongside cash flow and the balance sheet.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Accounting software can help you keep records, categorise transactions, track expenses, and produce financial statements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Accurate source data and regular review remain essential.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consider tracking <a href=\"https:\/\/www.sage.com\/en-za\/blog\/5-kpis-that-every-small-business-should-measure\" target=\"_blank\" rel=\"noreferrer noopener\">KPIs that every small business should measure<\/a> and reviewing <a href=\"https:\/\/www.sage.com\/en-za\/blog\/top-5-balance-sheet-ratios-for-managing-cash-flow\" target=\"_blank\" rel=\"noreferrer noopener\">balance sheet ratios for managing cash flow<\/a> to get a complete picture of your financial health.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.sage.com\/en-za\/accounting-software\/\" target=\"_blank\" rel=\"noreferrer noopener\">Explore Sage accounting software<\/a><\/p>\n\n\n<section class=\"wp-block-sage-faq\">\n\t\n<h2 id=\"h-frequently-asked-questions-about-net-income\" class=\"wp-block-heading\">Frequently asked questions about Net income<\/h2>\n\t\t\t<div class=\"faq-items\">\n\t\t\t<div class=\"wp-block-sage-faq-item\" id=\"faq-item-29c18c95\">\n\t<div class=\"faq-item-question\">\n\t\t\n<h3 id=\"h-does-net-income-include-tax\" class=\"wp-block-heading\">Does net income include tax?<\/h3>\n\t<\/div>\n\t\t\t<div class=\"faq-item-answer\">\n\t\t\t\n<p class=\"wp-block-paragraph\">Yes.<\/p>\n\n<p class=\"wp-block-paragraph\">Net income is the profit remaining after tax and other expenses have been deducted from total revenue.<\/p>\n\t\t<\/div>\n\t<\/div>\n<div class=\"wp-block-sage-faq-item\" id=\"faq-item-d3dda91a\">\n\t<div class=\"faq-item-question\">\n\t\t\n<h3 id=\"h-is-net-profit-the-same-as-net-income\" class=\"wp-block-heading\">Is net profit the same as net income?<\/h3>\n\t<\/div>\n\t\t\t<div class=\"faq-item-answer\">\n\t\t\t\n<p class=\"wp-block-paragraph\">Yes.<\/p>\n\n<p class=\"wp-block-paragraph\">Net profit and net income are commonly used to describe the same measure of profit after all expenses.<\/p>\n\t\t<\/div>\n\t<\/div>\n<div class=\"wp-block-sage-faq-item\" id=\"faq-item-49f5899c\">\n\t<div class=\"faq-item-question\">\n\t\t\n<h3 id=\"h-what-is-the-difference-between-net-income-and-taxable-income\" class=\"wp-block-heading\">What is the difference between net income and taxable income?<\/h3>\n\t<\/div>\n\t\t\t<div class=\"faq-item-answer\">\n\t\t\t\n<p class=\"wp-block-paragraph\">Net income is an accounting measure of profitability.<\/p>\n\n<p class=\"wp-block-paragraph\">Taxable income is calculated under South Africa&#8217;s Income Tax Act and may treat expenses and allowances differently.<\/p>\n\n<p class=\"wp-block-paragraph\">Speak to a registered tax practitioner or the South African Revenue Service (SARS) for guidance on your circumstances.<\/p>\n\t\t<\/div>\n\t<\/div>\n<div class=\"wp-block-sage-faq-item\" id=\"faq-item-1d3dc8da\">\n\t<div class=\"faq-item-question\">\n\t\t\n<h3 id=\"h-can-net-income-be-negative\" class=\"wp-block-heading\">Can net income be negative?<\/h3>\n\t<\/div>\n\t\t\t<div class=\"faq-item-answer\">\n\t\t\t\n<p class=\"wp-block-paragraph\">Yes.<\/p>\n\n<p class=\"wp-block-paragraph\">If total expenses are higher than total revenue for a period, net income is negative.<\/p>\n\n<p class=\"wp-block-paragraph\">This is called a net loss.<\/p>\n\t\t<\/div>\n\t<\/div>\n<div class=\"wp-block-sage-faq-item\" id=\"faq-item-5b7fb0fa\">\n\t<div class=\"faq-item-question\">\n\t\t\n<h3 id=\"h-what-is-a-good-net-income-margin-for-a-small-business\" class=\"wp-block-heading\">What is a good net income margin for a small business?<\/h3>\n\t<\/div>\n\t\t\t<div class=\"faq-item-answer\">\n\t\t\t\n<p class=\"wp-block-paragraph\">There is no single benchmark because margins vary by industry and business model.<\/p>\n\n<p class=\"wp-block-paragraph\">Compare your net income margin with similar businesses and with your own results over time.<\/p>\n\t\t<\/div>\n\t<\/div>\n<div class=\"wp-block-sage-faq-item\" id=\"faq-item-b491bd15\">\n\t<div class=\"faq-item-question\">\n\t\t\n<h3 id=\"h-how-often-should-you-calculate-net-income\" class=\"wp-block-heading\">How often should you calculate net income?<\/h3>\n\t<\/div>\n\t\t\t<div class=\"faq-item-answer\">\n\t\t\t\n<p class=\"wp-block-paragraph\">Many businesses review net income monthly as part of management reporting and at year-end for annual financial statements and tax purposes.<\/p>\n\t\t<\/div>\n\t<\/div>\n<div class=\"wp-block-sage-faq-item\" id=\"faq-item-dcd29ba3\">\n\t<div class=\"faq-item-question\">\n\t\t\n<h3 id=\"h-does-net-income-include-value-added-tax-vat\" class=\"wp-block-heading\">Does net income include value-added tax (VAT)?<\/h3>\n\t<\/div>\n\t\t\t<div class=\"faq-item-answer\">\n\t\t\t\n<p class=\"wp-block-paragraph\">Net income is generally calculated using revenue and expenses excluding VAT, because VAT collected on sales is not income and recoverable VAT paid on purchases is not an expense.<\/p>\n\n<p class=\"wp-block-paragraph\">VAT treatment can depend on your registration status and the transaction, so check your records or seek professional advice.<\/p>\n\t\t<\/div>\n\t<\/div>\n\t\t<\/div>\n\t<\/section>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Editor&#8217;s note: This article was originally published in February 2025 and has been updated for relevance<\/em><\/p>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice enewsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-84fe79b5-668d-41f8-a0cc-6229018c4ac9\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Net income is the profit left after a business subtracts all its expenses from total revenue. Learn the formula, see worked examples in rand, and compare net income with gross income, EBIT, and EBITDA.<\/p>\n","protected":false},"author":1774,"featured_media":71359,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_is_cornerstone":"","_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_opengraph-image":"","_yoast_wpseo_opengraph-image-id":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","_yoast_wpseo_twitter-image":"","_yoast_wpseo_twitter-image-id":"","_yoast_wpseo_schema_page_type":"","_yoast_wpseo_schema_article_type":"","_sage_video":false,"_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_primary_category":"25","sage_membership_post_content_type":"article","sage_membership_post_featured_video_id":"","sage_membership_post_video_type":"trailer","sage_membership_post_featured_video_duration":"","post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[25],"tags":[],"business_type":[],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[],"coauthors":[401],"class_list":["post-72882","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters"],"sage_meta":{"region":"en-za","author_name":"Yassir Malik","featured_image":"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2023\/09\/GettyImages-1350603328.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice South Africa","distributor_original_site_url":"https:\/\/www.sage.com\/en-za\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/72882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/users\/1774"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/comments?post=72882"}],"version-history":[{"count":5,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/72882\/revisions"}],"predecessor-version":[{"id":76609,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/72882\/revisions\/76609"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media\/71359"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media?parent=72882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/categories?post=72882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/tags?post=72882"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/business_type?post=72882"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/lilypad?post=72882"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/context?post=72882"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/industry?post=72882"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/persona?post=72882"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/imagine_tag?post=72882"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/coauthors?post=72882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}