What's the Gross Pay for Someone in Sales or for a Business Owner?

I had several good comments/questions on my post titled Pay Yourself Second and I'll be giving you my thoughts on these over the next few Sundays. Here's the next one to comment on:

I'm in sales, and I earn 50% profit on all the products I sell (we buy for $1 and sell for $2), plus I earn commissions. I tithe 10% on all my commissions of course, but I've always wondered, do I tithe on my profit (50%) or on the retail value (100%)? For example, if I pre-purchase a product for $20 and sell it for $40, do I tithe on the $20 or the $40?

Just to put a little context to this question, we were talking about paying God through tithing (first) before paying yourself through saving (second.) I noted that I felt the tithe was to be on your GROSS pay -- not your net. That's where this question came from.

Here's my take on the issue:

I start with the principle found in Proverbs 3:9 (NIV) which says, "Honor the LORD with your wealth, with the firstfruits of all your crops." In this verse as well as throughout the Bible where it talks about tithing, it is clear that the tithe is based on your INCREASE. In farming terms, this means your crops that grew (not the seed that was planted AND the crops, just the crops.) In today's terms, and this applies to anyone who's in business for themselves (or in sales as this person is), it means the final profit of the company. This is, after all, the gross increase that the individual person has as a result of God's blessing and as such is the amount that should be tithed on.

Let's give a simple example using the numbers above. Here's how it could play out (I won't address the commission issue since that's already tithed on):

• Total sales: $100,000
• Cost of Goods: $50,000
• Net profit of company (gross profit to individual): $50,000

So this person would tithe on $50,000 (whether or not he took it all out of the company) before paying taxes or spending for his needs.

Comments

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Thanks

[BigBuddha]

That's a very interesting take on tithing, my wife believes in tithing our pay, where as I have a more slightly different take on things. I would rather pay into an investment account which would strictly be for charitable purposes only, say I keep putting money into this account and use an index fund for it's investment plan. over the course of my working life if I contribute say 1000 of my pre-tax income into the fund yearly for 30 years at a return of 10% per annum, the fund would have a total balance of 181,943. And say it keeps earning 10% without me contributing anymore, that's a perpetual charitable gift of $18,000+ per year to whomever I felt was the most worthy of it, that fund would be able to provide charitable donations long after I am dead, that to me is giving back to the world indefinitely.

[Ciji]

Thanks for clearing this up! It's been a constant debate in my family. I'm the only business owner, so since they tithe their gross, they feel I should too. I makes sense that an employee and a business owner would have different kinds of gross "pay".