05 Aug Should You Tithe On Gross Or Net Profit? Before Or After Taxes? Let’s Talk About It
Tithing is an important part of the church. Not only is it referenced in the Bible as something you should do when possible, but it allows you to grow closer to God as well as support an organization that you believe in and that shares your values.
But the difficult thing about tithing is figuring out how much you should be donating. For example, many people wonder if they should be tithing based on their gross or net profit/income and before or after their taxes. Today, we’re going to address those questions to help you better understand how to best tithe regarding your situation. After all, not everyone owns a business, and not everyone has the same salary.
Bbefore we get started, let’s kick things off with a little refresher and dive into what the Bible actually says about tithing.
A Refresher: What the Bible Says About Tithing
The Bible includes many different verses on why it is important to give to the church.
There are Proverbs 11:25, “A generous person will prosper; whoever refreshes others will be refreshed.” When we are charitable, we feel better after. While there are a few different ways to interpret this passage, one way to view it is that generous people prosper in terms of being more connected to God.
Proverbs 3:27 states, “Do not withhold good from those to whom it is due when it is in your power to act.” This can essentially be boiled down to giving is a privilege, and those that can do so should do so when it is in their power to be charitable.
For a full list of some of the more notable verses, take a look at this blog.
While these quotes can be referring to being charitable in a more broad meaning, what does the Bible specifically say about tithing to the church? Quite a bit. But first, let’s discuss what tithing actually means.
“Tithing” is derived from an Old English term that means ‘one-tenth.’ Tithing is the practice of regularly giving 10% of your income to your local church. Its purpose was originally to take care of those running the church and upkeep the church itself. Both the Old and New Testament references tithing.
One of the most commonly known passages from the Old Testament that talks about tithing is Malachi 3:8-12:
“Will a mere mortal rob God? Yet you rob me. “But you ask, ‘How are we robbing you?’ “In tithes and offerings. You are under a curse—your whole nation—because you are robbing me. Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it. I will prevent pests from devouring your crops, and the vines in your fields will not drop their fruit before it is ripe,” says the LORD Almighty. “Then all the nations will call you blessed, for yours will be a delightful land,” says the Lord Almighty.”
This passage is about priests withholding the tithes required by the Law of Moses (Leviticus 27:30).
An important passage from the New Testament that speaks on tithing is Matthew 23:23, where Jesus condemns the Pharisees for tithing and ignoring the more important issues of justice, mercy, and faith:
“Woe to you, teachers of the law and Pharisees, you hypocrites! You give a tenth of your spices—mint, dill, and cumin. But you have neglected the more important matters of the law—justice, mercy and faithfulness. You should have practiced the latter, without neglecting the former.”
This is a very important passage because it illustrates that while tithing and giving back to God is important, it’s not enough. After all, not everyone can always afford to tithe consistently. Everyone can be kind to one another and work towards creating a more equal and caring society for all. Tithing is just a small part of your relationship with God. As long as you are giving back within your means and living life with God in your heart, it really doesn’t matter how much you are tithing to your church. It’s important to remember that as we continue this discussion.
Should You Tithe Based on Gross or Net Income/Profit? What About Before or After Taxes?
When it comes to tithing, this is a very common question. In fact, Dave Ramsey, the personal finance guru, has even been asked this question by a listener.
Ramsey’s response when asked if one should tithe on the gross or net income/profit:
“I tithe on the business profit after I take it home. I tithe before I take taxes out. There’s a lot of discussion and a lot of teaching both ways on that. I’m not a big doctrinal hairsplitter with people. I just don’t think you can out-give God. Some businesses don’t even have a 10% margin. Whatever the net profit of the business is, that’s what I’ve got to pay taxes on, and that’s what I tithe on.”
Ramsey goes on to cite a passage in Deuteronomy, which says to tithe on your net increase. However, Ramsey also states that he isn’t going to argue either way about what is the right way to tithe. “It doesn’t matter,” he says, “Just give to be a giver. It’s about changing your spirit anyway.”
And therein lies the real answer to these questions. There is no correct way to tithe. It’s all about giving within your means and whatever works best for you and your current financial situation.
For example, another person wrote in a question to Crown’s Ask Chuck series, stating that they have always tithed off their gross income, but that they have recently taken out their Social Security benefits to try and make their mortgage payments every month. He is now wondering whether they should continue to tithe off their gross income (which he says is usually a stretch) or if they should now tithe off their net income.
There is no right answer to this question. Instead, the writer of the question should do what makes sense for his family financially and what they feel convicted to do. The amount you give is not important. Just like what Matthew 23:23 tells us, what is important is that you tithe in addition to living a life that God wants you to live; a life that cares and loves for others.
Just like deciding whether to tithe with your gross or net income/profit, there isn’t a correct way to tithe when it comes to before or after-tax income.
For more answers to other common questions about finances and the Church—as well as plenty of other insightful topics—make sure to check out the rest of our blog. We cover topics from church management, to fundraising, communication, and volunteering.
If your local church is looking to improve their donation process, make sure to tell them to come our way! Our solutions allow churches to improve their tithing amounts while making it easier for their congregation members to donate.
Learn more here!