After Tax Income
What is After Tax Income?
After-tax income is the profit after subtracting income tax expense.
![ati 1](https://seeaccountingnow.online/wp-content/uploads/2021/08/ati-1.jpg)
How it Works
A business will have a pre-tax profit of a certain amount.
![ati 2](https://seeaccountingnow.online/wp-content/uploads/2021/08/ati-2.jpg)
The profit will be subject to an income tax rate.
![ati 3](https://seeaccountingnow.online/wp-content/uploads/2021/08/ati-3.jpg)
This tax is then deducted from pre-tax profit.
![ati 4](https://seeaccountingnow.online/wp-content/uploads/2021/08/ati-4.jpg)
The remainder is known as after-tax profit.
![ati 5](https://seeaccountingnow.online/wp-content/uploads/2021/08/ati-5.jpg)
This after-tax profit is shown on the income statement as net income.
![ati 6](https://seeaccountingnow.online/wp-content/uploads/2021/08/ati-6.jpg)
© R.J. Hickman 2020