What is Net profit?
Net profit is what's left after every expense — direct costs, overhead, taxes, interest, everything. It's the bottom line: the money the business actually earned. A company can have healthy gross profit and still lose money if overhead eats it all, which is why net profit is the number owners watch.
In practice
The bakery's $7,000 gross profit minus $4,500 rent, utilities, and insurance = $2,500 net profit for the week.
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Browse the calculatorsFrequently asked questions
Net profit vs. cash in the bank?
Different things. Net profit includes invoiced-but-unpaid revenue and non-cash expenses. You can be profitable and broke — that's a cash-flow problem, not a profit problem.
How much net profit should I reinvest vs. take home?
There's no universal split, but growing businesses often reinvest 20–50%. The key: decide deliberately each quarter instead of spending whatever's in the account.
Does owner's salary count before net profit?
If you're on payroll, yes — it's an expense. If you take owner's draws, those come out of profit after it's calculated. Either way, pay yourself consistently.