A word is five characters
WPM is not counted in real words, because word length varies and two tests would never be comparable. The standard defines a word as five characters including the space, so gross WPM is characters divided by five divided by minutes.
Net WPM subtracts uncorrected errors from that. It is the figure worth quoting, because gross WPM alone can be inflated by typing quickly and badly — a run of nonsense at speed scores well on gross and poorly on net.