Gross vs net: what's the difference?

Gross is the amount before anything has been taken out of it. Net is what remains once that something has been removed. The pair only means anything once you know what’s being subtracted, and that changes completely depending on where you meet the words: VAT on a price, tax on a wage, deductions on a business’s profit. Same two words, three different subtractions, so always check which one you’re looking at before comparing figures.

The VAT case

For prices, the subtraction is VAT. The net price is what the seller actually keeps; add VAT and you get the gross price, which is what the customer pays. A business that advertises a price “plus VAT” is quoting the net figure and letting the buyer do the addition. A price with “VAT included” or “inc. VAT” is already gross. This matters most when comparing quotes from different suppliers: one listing net and another listing gross will look like a price gap that isn’t really there.

Not to be confused with

Two other pairs borrow the same words but subtract something else entirely. On a payslip, gross pay is your salary before income tax and other deductions; net pay (take-home pay) is what actually lands in your account. In shipping and packaging, gross weight includes the packaging and container; net weight is the product alone, with the packaging’s weight subtracted out. In each case the logic is identical, but the thing being removed is not — so a “net” figure from one context tells you nothing about a “net” figure from another.