What do we call the income that remains after expenses are subtracted from gross income?

The income that remains after expenses are subtracted from gross income is referred to as "net" income. This term reflects the amount that an individual or business actually retains after accounting for all costs, taxes, and other expenses. Understanding this concept is essential because it gives a clearer picture of financial health, showcasing the actual earning capacity rather than just the total revenue generated.

Gross income represents the total earnings before any deductions; therefore, when expenses are taken into consideration, what remains is identified as net income. This figure is crucial for assessing profitability and is often used in financial statements to evaluate overall performance. In contrast, while terms like "revenue" and "profit" are related, they do not specifically refer to the income left after expenses in the same direct way that "net" does.