What Is Gross Income?
Total earnings before any taxes, deductions, or withholdings are subtracted.
Definition
Gross income is your total earnings from all sources before any deductions: salary, hourly wages, bonuses, tips, commissions, overtime, freelance income, rental income, investment income. For employees, your gross pay is what your employment contract says. For tax purposes, gross income (broader than gross pay) is the starting point on Form 1040 before adjustments to AGI. Lenders use gross monthly income for DTI and qualification calculations, not net.
Example
$80,000 annual salary = $80,000 gross. Net (take-home) might be $60,000 after federal/state/FICA/401(k) deductions.
Use It
Try the Salary to Hourly CalculatorRelated Terms
Net Income (Take-Home Pay)What is left of your paycheck after taxes, FICA, and any pre-tax deductions are subtracted.Marginal Tax RateThe tax rate applied to your last (highest) dollar of income, not your entire income.DTI (Debt-to-Income Ratio)Your total monthly debt payments divided by gross monthly income, used by lenders to qualify you.