Determining The Gross Income for SME
In Malaysia, companies with a gross income of less than RM50 million per year are considered small and medium enterprises (SMEs). For these companies, determining gross income is an important step in calculating taxes and other financial obligations.
Gross income is the total amount of money a company earns before any deductions or expenses are taken into account. To determine gross income, companies should consider all sources of revenue, including sales, investments, and rental income.
For SMEs in Malaysia, gross income can be calculated by adding together the following:
- Sales revenue: This includes all money earned from the sale of goods or services.
- Investment income: This includes any income earned from investments such as dividends, interest, or rental income.
- Other income: This includes any other sources of revenue, such as government grants or subsidies.
Once all sources of revenue have been accounted for, SMEs can calculate their gross income by adding them together. It’s important to note that any deductions, such as cost of goods sold, should not be taken into account when determining gross income.
It’s also important to note that any income earned outside of Malaysia should not be included in the calculation of gross income for the purpose of determining the company’s income tax in Malaysia.
It’s important for SMEs to keep accurate records of their revenue and expenses to ensure they are accurately calculating their gross income. Proper record keeping can also help SMEs to identify areas where they can improve their financial performance and make more informed business decisions.
