Understand net income: its definition, calculation method, and its critical role in business decisions and tax reporting.

For an hourly employee, wages can include breaks, on-call time, overtime, travel time and training. Gross pay is the starting point for all calculations related to employee compensation and taxes.

Here's the difference between gross and net, especially when it comes to income calculations.

How to Calculate Federal & State Taxes for Gross-Up Purposes. When you reimburse an employee for moving expenses or give your employee a bonus, you can "gross up" the amount to cover the tax burden.

Although gross pay is the amount provided on financial documents such as tax forms, net pay represents how much your employees actually have to spend on payday. To calculate net pay from gross pay ...