In today's modern engines, horsepower is calculated electronically on an engine dynamometer, or dyno. Four specific classifications need to be mentioned, as they are often confusing:

• Brake Horsepower (bhp): Prior to electronic bench testing, horsepower was quantified as the amount of resistance against a flywheel brake. Although the method is no longer used, the term remains an industry standard.
• Gross Horsepower: Absolute maximum horsepower at the flywheel, with no load or drag from auxiliary systems, such as the alternator, water pump, etc. Created in an ideal environment with precisely controlled intake and exhaust flow characteristics, this category is of little practical use.
• Net Horsepower: Maximum horsepower at the flywheel, with intake and exhaust systems in place and accounting for load from auxiliary systems. This is what most automotive manufacturers publish as SAE net horsepower.
• Real-wheel Horsepower: Measured on a chassis dyno, the maximum horsepower transferred to the ground by the rear wheels. It can be affected by gearing, with lower (numerically higher) gearing tending to indicate a lower torque peak. Considered the most practical measurement of usable horsepower, it is the modern standard used whenever possible.