In Shopify, gross sales is product price times quantity, before discounts, returns, taxes and shipping. Net sales is gross sales minus discounts and sales reversals, and it also leaves out VAT and shipping. Total sales adds taxes, shipping and fees back. A P&L's net revenue starts from net sales, adds shipping net of VAT and drops cancelled orders.
Open a Shopify sales report and three headline figures sit next to each other: gross sales, net sales and total sales. They answer different questions, and only one of them has the VAT inside it. Gross sales is the price of everything ordered before discounts, returns, taxes and shipping. Net sales takes the discounts and the returns off and still leaves taxes and shipping out. Total sales puts taxes, shipping and fees back on, which makes it the closest figure to what customers actually paid. None of the three is quite the revenue a margin should be measured on, so this post walks through what each one contains, in Shopify's own definitions, and the short bridge from net sales to the net revenue a P&L uses.
In short
- Gross sales is product price times quantity, before discounts, sales reversals, taxes and shipping.
- Net sales is gross sales minus discounts and sales reversals; Shopify leaves taxes and shipping out of it as well.
- Total sales is the one figure in the report with the VAT inside: net sales plus taxes, shipping charges and fees.
- Net revenue on a P&L starts from net sales, adds the shipping customers paid net of its VAT, and leaves cancelled orders out on both days.
Gross sales: the price of what was ordered
Shopify defines gross sales as product price times quantity, before taxes, shipping, discounts and sales reversals. It measures what the catalogue brought at the prices charged before anything was taken off, which makes it a real measure of activity and a poor basis for any decision about money: the discounts you granted and the returns you took back are still inside it.
Two details trip people up. The tax is already out, even in a store whose shelf prices include VAT, because total sales is built by adding the taxes back on top; the price a customer saw on the product page is not the figure in this column. And a statement that starts from gross merchandise value, the full ticket price of everything ordered, sits higher still, because it counts a compare-at price where one was set and keeps the VAT in until a later line takes it out.
Net sales: discounts and reversals off, VAT still out
Net sales does not include shipping charges or taxes. Shopify Help Center, Finances report, checked 1 Oct 2026
Net sales subtracts the discounts and what Shopify now calls sales reversals, its broader word for returns: returned items, cancellations, order edits and adjustments to shipping, taxes, fees and discounts. Each reversal shows as a negative value on the day it was processed rather than against the original order, which is the same day-of-issue rule a well-built statement uses for refunds. So Shopify's net sales and a P&L agree on which day a return belongs to.
What net sales does not hold is the shipping. Delivery charged to customers sits on its own line, which keeps net sales clean for questions about products and campaigns, and it also means net sales understates what the store took in on every order where the customer paid for delivery.
Total sales: the figure with the VAT inside
Total sales is net sales plus taxes, shipping charges and fees: what customers spent. It is the right figure for cash questions and the wrong one for margin questions, because the VAT inside it was collected for the tax office, nearly a fifth on top of the net figure at a 19% rate, which a VAT calculator splits out in a second, and because the shipping inside it has a cost of its own that no sales report shows.
| Figure | Discounts taken off | Reversals taken off | VAT inside | Shipping inside |
|---|---|---|---|---|
| Gross sales | no | no | no | no |
| Net sales | yes | yes | no | no |
| Total sales | yes | yes | yes | yes |
From net sales to net revenue
Net revenue, the line every margin on a P&L is measured against, starts close to net sales and differs in two places. It includes the shipping customers paid, net of its VAT and of any shipping discount, because delivery income is revenue and the parcel it pays for is a cost on the same statement. And it treats a cancelled order as an order that never happened, where Shopify includes it and then reverses it.
The cancellation difference is about days rather than totals. Shopify counts a cancelled order as a sale on the day it was placed and as a reversal on the day it was cancelled, so over a long window the two cancel out, while a single day or a month boundary can carry one without the other. A statement that leaves cancelled orders out entirely never shows the movement at all, which is the subject of cancelled and test orders, the other filter every report has to decide once. Test orders are the easy half: Shopify's sales reports leave them out, and so does a P&L.
| Step | What changes |
|---|---|
| Net sales in Shopify | gross sales minus discounts and sales reversals, without VAT or shipping |
| Plus shipping customers paid | net of its VAT and of shipping discounts |
| Cancelled orders | left out of both days instead of a sale and a later reversal |
| Net revenue | the denominator of every margin and cost share on the statement |
Getting from one to the other
On a single month the bridge is short: take net sales, add the shipping charged without its VAT, and check whether a cancellation near the month boundary moved a sale into one month and its reversal into the next. A gross to net revenue calculator walks the same bridge from the other end, from the ticket value down, on your own figures in a couple of minutes, which is worth doing once simply to see the size of your own gap.
The shipping line is the one worth watching. On a store that charges for delivery it is real revenue, and leaving it out of the denominator makes every cost share look slightly larger than it is, while netting it against the carrier bill hides whether delivery is recovered at all. Most stores under-recover it, a few over-recover on small baskets, and neither is visible until both halves sit on the statement.
Which figure to quote, and to whom
Use net revenue for anything involving margin, cost ratios or break-even, because it is the only denominator that makes cost percentages comparable. Use net sales for questions about demand, products and campaigns, where shipping and tax are noise. Use total sales for cash questions, what customers paid before the payment provider took its fees. Use gross sales when somebody asks what the catalogue brought before discounts, which is rarely.
And when two reports disagree about a month, check which of the three each one is showing before assuming anything is broken. That single question resolves most such cases, and it takes about thirty seconds.
A correction, made on 1 Oct 2026: an earlier version of this post said that Shopify's net sales still contains the VAT. It does not. Shopify's definitions leave taxes out of both gross sales and net sales, and total sales is the figure that includes them. Everything above is the corrected version.