Enter the total revenue and total expenses into the calculator to determine the total net profit.

## Net Profit Formula

The following formula is used to calculate the net profit of a business.

NP = R – E

- Where NP is the net profit
- R is the total revenue
- E is the total expense

Some important things to keep in mind with the above equation. In general the total revenue and total expenses should only be considered for the specific aspect or product being analyzed. For example, you should not use the total revenue for the entire business and then the total expense for a specific portion of the business.

## FAQ

**What is net profit?**

A net profit is the total amount of money earned after expenses are paid. Hence the formula of revenue – expenses. Typically the larger the net profit the better a business is performing.

**Do you have to pay taxes on net profit?**

Yes in most cases taxes are paid on net profits alone, not on total revenue.

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