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

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## EBT Formula

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

EBT = R – OC

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

## 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?

**First, determine the total revenue earned for the business.**For this example, the total revenue is given as $50,000.00.

**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.

**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