Net Profit

Definition

Business income minus expenses; the amount gig workers pay self-employment tax on.

Related Terms

Schedule C

IRS form for reporting income and expenses from sole proprietorship or self-employment on your personal tax return.

Gross Income

Total income received before any deductions or expenses are subtracted.

FAQs

What taxes apply?

Self-employment tax and income tax on net profit.

Similar Terms

1099 Form

IRS tax form reporting income paid to non-employees, commonly 1099-NEC for contractor pay or 1099-K for payment platforms.

1099-K

Tax form reporting payments from payment networks like PayPal or gig platforms when exceeding annual thresholds.

1099-NEC

Tax form for non-employee compensation of $600 or more, replacing Box 7 of the old 1099-MISC for contractor payments.

Self-Employment Tax

Social Security and Medicare taxes for self-employed individuals, totaling 15.3% on net earnings.

Fact-Checked Expert Reviewed Regularly Updated

Last updated: January 18, 2026

Reviewed by GigFinance Team, Gig Economy & Finance Experts

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Important Disclaimer: This content is for informational purposes only and should not be considered tax, legal, or financial advice. Consult a qualified professional (CPA, tax attorney, or financial advisor) for advice specific to your situation.

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