• Net income after taxes (NIAT) is a financial term used to describe a company’s profit after all taxes have been paid.
• Net income after taxes represents the profit or earnings after all expense have been deducted from revenue.
• Companies that increase net income have more cash to invest in the company’s future, pay dividends, and buyback stock.

Net income after taxes (NIAT) is the net income of a business less all taxes. In other words, NIAT is the sum of all revenues generated from the sale of the company’s products and services minus the costs to run it. Revenue and sales are sometimes used interchangeably by companies. Also, retail companies often use the term net revenue or net sales, because they often have returned merchandise by customers. The total amount of rebates to customers from returns is deducted from the revenue total for the period.

Regardless of the term used by a company to describe its total revenue earned from sales, revenue is always located at the top of the income statement. As a result, revenue is the figure that all costs and expenses are deducted from that ultimately leads to net income, which rests at the bottom of the income statement. This is why revenue is referred to as the top line, while net income is called the bottom line.

Net income after taxes is calculated by taking revenue and subtracting all of a company’s expenses and costs, including the following:

• Cost of goods sold, which represents the costs involved in production including direct labor and direct materials or inventory
• Depreciation, which is the process of expensing or spreading out the cost of fixed assets over their useful life
• Charge-offs, which can be one-time write-offs or losses
• Interest expense on any debt including short-term debt and the interest portion for that period for long-term debt, such as bonds issued
• Taxes paid to the government
• Overhead costs, which include the staff and building for the corporate office are listed on the income statement as selling, general, and administrative (SG&A)
• Research and development spending

Although net income after taxes is essentially the same as net income, it is used in financial statements to differentiate between income before taxes and income after taxes. The two figures can also be described as pre-tax income and after-tax income.