Enter the total revenue and total operating costs into the calculator to determine the earnings before tax (EBT).

## EBT Formula

The following formula is used to calculate the earnings before tax:

 EBT = R - OC
• Where EBT is the earnings before tax
• R is the total revenue generated ($) • OC is the total cost of operations ($)

To calculate the earnings before tax, subtract the total cost of operations from the total revenue.

## EBT Definition

What is EBT?

EBT, short for earnings before tax (also commonly referred to as EBIT or earnings before interest and tax), is a term used in business to describe the total amount of profit made from a business before taxes are taken.

## Example Problem

How to calculate EBT?

1. First, determine the total revenue earned for the business.

For this example, the total revenue is given as $50,000.00. 2. Next, determine the total costs during the same time period. This is typically all operational and direct costs associated with the business. In this case, the costs were$30,000.00.

3. Finally, calculate the EBT using the formula.

Using the formula above, the EBT is calculated to be:
EBT = R – OC
EBT = $50,000 –$30,000
EBT = \$20,000