28 Feb

I was helping out at a print shop when I was 15 years old. The owner quizzed me with the question, "I can give you $50.00 . . . would you want that to be Gross or Net?"

I blurted out GROSS b/c it sounded similar to a large quantity of something which is how I knew the word gross, a gross is 12 dozen (144) of something. "I'll take a gross of paper towel rolls, please." 

Well, that and some days my hair feels gross. But that's a different kind of gross. 

The only net I knew was from tennis. 

To answer, I blurted out "Gross!"

And they laughed. 

Why? Because whatever you earn in total is the gross amount. If you work for $15/hour at Burgerville and work 20 hours in a week ($15 x 20 hours = $300.00 Total). That's your gross pay. If I'm a business owner and sell 50 burgers for $6.00 each ($6.00 x 50 = $300.00 Total) That's my gross profit. 

But whether you work for someone else at Burgerville or your own business selling burgers, there is a cost to doing business. At Burgerville, you're required to pay (so the employer withhold's from your paycheck) some of your check to pay your state and federal taxes. It's usually a percentage (%). You may have earned (or grossed) $300.00 for that pay period but your paycheck may only be for $210.00, which is your net pay. Think of net as the money left after all your obligations are met.

Now, going back to my boss' question . . . Would I want $300.00 Gross or Net? 

Gross says I'm still going to see some money taken away or I'll have expenses to pay. 

Net says it's the total after those expenses are paid.

So $300 net is actually more than getting $300 gross

Wish I would have said Net.  But I didn't and so my $50.00 pay turned into a total of $36.00 I took home. 

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