EBT Calculator — Earnings Before Tax

Calculate earnings before tax (EBT) — also called pre-tax income — from revenue, cost of goods sold, operating expenses, interest expense, and other income, then see the estimated tax expense and net income at your effective tax rate.

Quick Facts

Formula
EBT = Revenue − COGS − Opex − Interest + Other Income
Equivalent to EBIT minus interest expense, plus any non-operating income or expense.
Net income link
Net Income = EBT × (1 − Tax Rate)
EBT is the last line on the income statement before income tax is subtracted.

Your Results

Calculated
Earnings before tax (EBT)
-
Pre-tax profit or loss
EBT margin
-
EBT as a % of revenue
Estimated tax expense
-
EBT × effective tax rate
Net income (after tax)
-
EBT minus tax expense

Ready

Enter revenue, costs, interest expense, and tax rate, then press Calculate.

How the EBT Calculator works

Earnings before tax (EBT), also called pre-tax income, is the profit a business has left after subtracting the cost of goods sold, operating expenses, and interest expense from revenue — but before income tax is applied. It is the last line on the income statement before the tax provision, which makes it a useful, apples-to-apples way to compare profitability across companies that carry different tax situations.

The formula

Starting from revenue, the calculator works down the income statement in the standard order:

Gross Profit = Revenue − Cost of Goods Sold

Operating Income (EBIT) = Gross Profit − Operating Expenses

EBT = EBIT − Interest Expense + Other Income (net)

"Other income, net" captures non-operating items such as investment income, gains or losses on asset sales, or one-off items, entered as a positive number for net income or a negative number for a net expense. From EBT, the estimated tax expense and net income follow directly:

Tax Expense = EBT × Effective Tax Rate (floored at zero when EBT is negative)

Net Income = EBT − Tax Expense

Worked example

With the default figures — $500,000 revenue, $220,000 cost of goods sold, $150,000 operating expenses, $15,000 interest expense, no other income, and a 21% effective tax rate — gross profit is $280,000, operating income (EBIT) is $130,000, and EBT is $130,000 − $15,000 = $115,000. At a 21% effective tax rate, estimated tax expense is $24,150, leaving net income of $90,850. EBT margin is $115,000 / $500,000 = 23%.

EBT versus EBIT versus net income

These three profitability lines are easy to confuse because they differ by only one or two subtractions. EBIT (earnings before interest and taxes) excludes both interest expense and taxes, so it reflects pure operating performance regardless of how the company is financed. EBT takes EBIT and subtracts interest expense (plus adjusts for other non-operating items), showing profit after the cost of debt but before tax. Net income subtracts tax expense from EBT, arriving at the bottom line. Comparing EBT across companies with similar operating models but different capital structures shows how much interest expense — not taxes — is affecting profitability.

Notes and assumptions

  • This calculator uses a single flat effective tax rate applied to EBT; it does not model tax brackets, deferred taxes, credits, or jurisdiction-specific rules.
  • When EBT is negative (a pre-tax loss), the estimated tax expense is floored at zero rather than modeled as a tax refund, since actual treatment of net operating losses varies by jurisdiction and depends on rules this calculator does not attempt to capture.
  • "Other income, net" is a simplification of non-operating items; real income statements may break these out into several separate lines.

Frequently Asked Questions

What is EBT (earnings before tax)?
EBT, or earnings before tax (also called pre-tax income), is the profit a business has left after subtracting cost of goods sold, operating expenses, and interest expense from revenue, before income tax is applied. The formula is EBT = Revenue − COGS − Operating Expenses − Interest Expense + Other Income.
How is EBT different from EBIT?
EBIT (earnings before interest and taxes) excludes both interest expense and taxes. EBT goes one step further by subtracting interest expense: EBT = EBIT − Interest Expense + Other Income. So EBT sits between EBIT and net income on the income statement — it reflects the cost of debt but not the cost of taxes.
How do you get net income from EBT?
Net income equals EBT minus the tax expense: Net Income = EBT − (EBT × Tax Rate), or equivalently EBT × (1 − Tax Rate). For example, an EBT of $115,000 taxed at a 21% effective rate leaves a tax expense of $24,150 and net income of $90,850.
Can EBT be negative?
Yes. When cost of goods sold, operating expenses, and interest expense together exceed revenue and other income, EBT is negative — a pre-tax loss. This calculator floors the estimated tax expense at zero in that case, since a simple flat-rate model should not imply a company profits from a tax refund on a loss.

Related calculators