If you are celebrating a successful work week, but are a little confused as to why the numbers don’t seem to be reflected in your bank account when you go to check—the net income feature rolling out in the Solo app will help you!

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Your Net Income v. Your Gross Income?
First, it’s important to understand the difference between your Gross and Net Income. Your Gross Income is all of the income that you bring in without any expenses taken out. Your Net Income is the amount of money left over after all the expenses have been paid. Net income is an essential measure of an independent worker’s financial performance. This is the money that you can use to cover your bills, pay for living costs, reinvest in your business of one, or save for the future. Depending on your tax situation, it can also be the income amount that you will owe taxes on at the end of the year.

How is Net Income Calculated?
Take your gross income, which is the total amount of money earned from all sources, then subtract all of your tracked expenses including car payments, car maintenance, gas, insurance, your phone bill, cleaning supplies, and any other costs associated with your gig work business like hot bags, car phone mounts, car snacks for passengers, and more. The result is your net income before taxes. Check out the “Taxes” page in the Solo app under the “Home” section to see your net income after taxes.

If you decide to track your work related miles with Solo, the IRS allows you to deduct 65.5 cents per mile driven against your gross income to account for your car related expenses (maintenance, gas, etc.). We can help you track these miles automatically in the Solo app and will include these in your expenses when calculating your net income.

Why is Net income Important?
Net Income is what you are actually taking home to pay for all of life’s expenses.

Net income is a critical metric that you should be using to measure your efficiency and understand how much you’re really taking home at the end of each work day. Knowing your net income can also help you make better financial decisions and plan for the future. 

And we get it—we know you’re busy. Whether it’s gig work to provide for yourself, a job outside of your independent work, or taking care of family—it can be easy to put the administrative side of your business of one on the back burner even though it’s also important.  That’s why we are continuing to roll out features to make managing your business even easier! 

So, if you haven't already, update the Solo app—we'll help you calculate your net income so you can use it to achieve your financial goals.