Net Farm Income Calculator

Work out net farm income instantly with clear inputs, formula shown and shareable results.

About Net Farm Income Calculator

Net farm income is gross revenue less every cost of running the business: variable costs of production, fixed costs such as rent, insurance and permanent labour, and the non-cash charges of depreciation and interest. It is the figure that shows whether the farm is building or eroding wealth.

Formula

Net farm income

Net farm income = revenue - variable cost - fixed cost - depreciation and interest

Worked example

With the default values below, Net Farm Income Calculator returns Net Farm Income of $130,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Gross Farm Revenueminimum 0: 850,000
Total Variable Costminimum 0: 480,000
Fixed Costminimum 0: 150,000
Depreciation And Interestminimum 0: 90,000

Results

Net Farm Income: $130,000.00
Gross Margin: $370,000.00
Total Cost: $720,000.00
Net Margin On Revenue: 15.29%

Step by step

1Values used
2Net farm income
3Net Farm Income= 130,000.00
4Gross Margin= 370,000.00
5Total Cost= 720,000.00
6Net Margin On Revenue= 15.29

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why include depreciation when no cash leaves the farm?

Machinery and buildings wear out and must eventually be replaced. Ignoring depreciation shows a profit that quietly consumes the asset base.

Is net farm income the same as taxable income?

No. Tax rules have their own depreciation schedules, allowances and exemptions for agricultural income. Use the tax computation for filing and this figure for management.