The maximum output voltage of an amplifier can be calculated from the output power spec, this cannot be exceeded and if the signal reaches this level then it will clip and distort.
Dynamic range - is the space between the noise floor and the maximum output voltage. This is the space for the signal and we want this to be big for sound quality.
When we amplify (or add gain) we reduce the dynamic range i.e. the signal and the noise get bigger but the maximum voltage remains the same.
Headroom - is the space between the signal and the maximum voltage which we can think of as a reserve for momentary peaks in signal level.
So in an ideal world we’d just have the gain set to the level that we wanted to listen at with a bit of headroom. It’d be great if it was that simple but…
Most amplifiers (for a variety of reasons) offer the user little or no control of the amount of gain applied.
Different sources have wildly different output voltages, consumer line level is defined as 0.316V RMS but most DACs will put out 2V, that’s 16dB difference!
That’s why we have a volume control or attenuator. For a number of reasons this is usually before the main gain stage which means it attenuates the small signal before it is amplified. And the killer is that the noise added to the small signal will be amplified by the following stages (raising the noise floor and reducing the dynamic range).
So the point of saying all that is to explain that if your system has excessive amounts of gain then you are sacrificing dynamic range and listening to more noise than you need to… take a look at how far down you have the volume control set. So if you can set a lower level of gain and still get the volume you want you’re best going with that… the maximum output is a constant and won’t change when you adjust the gain – which means it won’t affect your headroom.