You may hear it referred to in two different ways: gross annual income and net annual income. Annual income refers to how much income you earn in one year before deductions.
Net annual income is your annual income after taxes and deductions. Household income is the total gross income of all members in a household. Lenders assess risks and base how much they will lend you off your household income. Personal gross annual income is the amount on your paycheck before taxes and deductions.
When preparing and filing your income tax return, gross annual income is the base number you should start with. Gross business income is listed on your business tax return. Gross income in business is calculated as the total company sales minus the cost of goods sold.
This number is what investors look at when assessing a potential company. Generally, you can calculate your annual income with a very simple formula. Convert your hourly, daily, weekly, or monthly wages with the formula below to get your annual income. Your annual income and household income are good indicators of your financial health. But an employee should be able to calculate an annual figure for at least the current year by multiplying the pay by the number of pay periods.
While the annual salary represents a "floor" for an employee's wages, gross pay can exceed that level. But while every employee who is paid earns gross pay, not every employee earns a salary.
Of course, if a salaried employee receives no overtime or other added pay, the gross pay and annual salary figures may be identical, but that is the only time the terms are interchangeable. Eric Strauss spent 12 years as a newspaper copy editor, eventually serving as a deputy business editor at "The Star-Ledger" in New Jersey before transitioning into academic communications. His byline has appeared in several newspapers and websites.
Strauss holds a B. Gross Pay vs. Units used in the determination of wages paid out can differ dramatically. Some positions use the units of product that the employee has produced while others use the number of hours worked. For some positions, benefits can comprise a large portion of their compensation while other positions offer no benefits at all. Nonmonetary benefits can include items such as daycare, university tuition, vacation time and housing.
These items tend not to be included in quoted numerical figures of compensation, if only because many of them have no easily derived numerical value. Alan Li started writing in and has seen his work published in newsletters written for the Cecil Street Community Centre in Toronto.
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