Business logic refers to the logic that embodies business rules rather than the view of data or storage of data. It is an term of art used in software architecture to signify a software component, layer (or tier) of software functionality, software library or similar that performs operations on some kind of data passed back and forth through it. When software is designed to achieve a separation of concerns, the business logic is meant to be the domain of a business manager, even a non-technical one.

Business logic is usually associated with the three-tier software architecture.

For instance, there may be a persistence component library and an object-relational mapping layer which brings information from a database or external data source and packages that information into more abstract objects. The persistence layer and the object relational mapping layer are the first tier. This tier hides the persistence implementation from the layers above.

The objects provided by the object relational mapping layer are designed to have a closer correspondence to the business needs the software is meant to satisfy. These objects can be described in the language of a person, even a non-technical person, who is managing the business at hand. This is the business logic. It should be designed with the assistance of business domain experts. If a business is computerizing a process previously done by hand, the business domain experts are the people who did the work themselves and know what is involved in the decision making required to do the job. This is the second tier.

The third tier is the "display" layer, which is more concerned with how the business communicates with the consumers of the business process.