Business logic refers to the rules and procedures that define how data is created, stored, and modified in a software application to meet specific business requirements. It is the part of the code that handles the core functionality of the application, including calculations, data validation, decision-making processes, and workflow management. Business logic is separate from the user interface (UI) and data access layers, making it easier to manage and adapt to changing business needs without affecting other parts of the system.

In software development, properly implementing business logic is crucial to ensure that the application behaves as expected and meets the organization's objectives. Developers often use business rules engines, middleware, or custom code to manage and enforce business logic. By encapsulating business logic in a dedicated layer, software systems become more modular, maintainable, and scalable, allowing organizations to update or extend functionality with minimal disruption to the overall system. This separation also enhances the ability to test and validate the business logic independently, ensuring that it accurately reflects the desired business processes.