SAE Gross Horsepower
This is the old process that American manufacturers used as a guide for rating their cars. It was in place until 1971. SAE gross also measures horsepower at the flywheel, but with no accessories to bog it down. This is the bare engine with nothing but the absolute essentials attached to it; little more than a carb, fuel pump, oil pump, and water pump. Because the test equipment on the engine is not the same as in SAE net, it is impossible to provide a mathematical calculation between SAE net and SAE gross. As a general rule, however, SAE net tends to be approximately 80% of the value of SAE gross. SAE J245 and J1995 define this measurement.
SAE Net Horsepower
In 1972, American manufacturers phased in SAE net horsepower. This is the standard on which current American ratings are based. This rating is measured at the flywheel, on an engine dyno, but the engine is tested with all accessories installed, including a full exhaust system, all pumps, the alternator, the starter, and emissions controls. Both SAE net and SAE gross horsepower test procedures are documented in Society of Automotive Engineers standard J1349. Because SAE net is so common, this is the standard we will use to compare all others.
On the Dyno
Often Horsepower is tested in the chassis and measured at the drive wheels. This takes into consideration the transmission and differential. It possibly the most accurate way to test for horsepower.