# How to Calculate the Percent Change in Net Income

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Net income is the income generated after expenses, such as taxes and overhead, are taken into consideration. Business generally look at net income on monthly or yearly bases. While net income change is important to personal finances, businesses look at the monthly and yearly changes in depth, as the change tells the business how much money has been lost or gained compared with the previous net income. The full effect of the change is more easily understood if calculated as a percentage.

Subtract the net income of the first time period from the net income of the second time period. For example, if net income was \$400 in the first year and \$500 in the second year, you would subtract \$400 from \$500, resulting in \$100.

Divide the difference of the two net incomes by the net income of the first time period. In the example, divide the difference of \$100 by the first-year income of \$400, resulting in 0.25.

Multiply the quotient by 100 to find the percentage difference. In the example, 0.25 equals 25 percent -- the percent change in net income.