Gross is the whole amount before anything is taken off; net is what is left after deductions. A gross salary of £40,000 becomes a net figure of roughly £31,000 once tax and National Insurance come out, and a parcel's gross weight includes the box while its net weight is the contents alone. For pay and for weights, net is the smaller number.
The core difference
These are not synonyms with a shade of difference between them — they are two ends of a single calculation. Gross is the starting figure. Net is the finishing figure. Everything subtracted in between (tax, packaging, costs, discounts, returns) is what separates them.
Where you meet gross
Gross is the headline number, the one quoted before reality is applied to it.
- Gross pay — your salary before tax and deductions.
- Gross profit — revenue minus the direct cost of the goods, but before overheads.
- Gross weight — the goods plus the container.
- Gross domestic product — total output, no deduction for depreciation.
Where you meet net
Net is the number that actually reaches you.
- Net pay — what lands in your bank account, sometimes called take-home pay.
- Net profit — what remains after every cost, including tax and interest.
- Net weight — the contents alone, which is the figure printed on a food label.
The test
Ask: has anything been taken off yet? If nothing has, the figure is gross. If deductions have already been applied, it is net. As a sanity check, for pay and for weights the net figure is smaller than the gross figure of the same thing — if your arithmetic gives you the reverse, look for swapped labels. It is not a universal law, though: net income can exceed gross profit once other income, gains or tax credits are counted, and a figure quoted "net of" something can behave differently again.
A memory trick
Picture a fishing net: things fall through it and only what is caught remains. Net is what remains. Alternatively, note that net is the shorter word and, in the everyday cases, the smaller number.
The edge cases
Two traps are worth knowing. First, VAT: in Britain a price quoted "net of VAT" means VAT has not yet been added, so here the net price is the smaller one but it will grow, not shrink. The phrase "net of X" always means "with X already taken into account," which is why it repays reading slowly.
Second, gross profit is not profit in any ordinary sense. It only deducts the direct cost of making or buying what you sold. Rent, salaries and tax still have to come out. A business can post a healthy gross profit and a net loss in the same year, which is exactly why financial statements report both.
Finally, both words have unrelated everyday senses — gross meaning coarse or unpleasant, net meaning the mesh — that context sorts out without effort.
Frequently Asked Questions
Is my salary quoted gross or net?
Almost always gross. When a job advert says £35,000, that is the figure before income tax, National Insurance and any pension contribution. Your net pay — what actually arrives — will be noticeably lower, and payslips list both.
Which comes first, gross or net?
Gross. Every calculation starts from the gross amount and subtracts its way down to the net amount. If you are ever unsure which figure you are looking at, ask what has been deducted; if the answer is nothing, it is gross.