net income

Net income, also known as net earnings , is income received after mandatory withholdings and deductions , such as state and federal income tax and Social Security contributions. Specifically, net income is gross income minus these mandatory withholdings and deductions . For a business , net income is calculated as sales minus the cost of goods sold, general expenses , operating expenses, depreciation , interest , taxes , and other expenses. Interest on debt is another possible deduction that should be accounted for in net income.