An individual’s gross income, also known as gross pay on the payroll, is the sum of wages before taxes and other deductions that an employer pays to an employee.
(Artwork: The street)
Gross income
Concept
Gross income in English is Gross Income.
Viewing: What is Gross Income?
An individual’s gross income, also known as gross pay on the payroll, is the sum of wages before taxes and other deductions that an employer pays to an employee.
Gross income includes income from all sources and is not simply income received in cash, but may include property or services received.
Gross annual income is the pre-tax amount a person earns in a year and includes income from all sources.
For companies, gross income can replace the concept of gross profit.
The company’s gross income is on the income statement, which is the revenue from all sources less the company’s cost of goods sold.
Features of Gross Income
Personal gross income
Lenders or landlords will look at an individual’s gross income to determine if the individual is a suitable borrower/tenant.
For individuals, the gross income figure used on an income tax return includes not only wages or salaries, but also other forms of income, such as tips, capital gains, rental payments. , dividends, alimony, pension or loan interest. After subtracting tax deductions, the result is adjusted gross income.
See also: What is the meaning of the word Plug In? Some Commonly Used Plugins
After tax deductions or exemptions are applied, taxable income can be significantly less than the individual’s gross income.
There are sources of income that are not included in gross income for tax purposes but may still be included when calculating gross income from the point of view of the lender or creditor.
The most common sources of non-taxable income are social security benefits, life insurance payments, certain inheritances or gifts, and bond interest.
Gross income in the business
A company’s gross income, or gross margin, is the simplest measure of a company’s profitability.
The gross income index includes the direct costs of producing or providing goods and services, but excludes other costs related to sales, administration, taxes, and other related costs. to running the business in general.
Example of Gross Income
Example of Personal Gross Income
Assume that an individual earns an annual salary of $75,000, earns $1,000 a year in interest from a savings account, collects $500 in dividends per year, and receives $10,000 a year in rental property income.
That individual’s annual gross income is: $75,000 + $1,000 + $500 + $10,000 = $86,500
Example of Gross income in business
Gross income usually appears on a company’s income statement but is not required. If not displayed, it is calculated as total sales minus COGS.
See more: What is Da Kieng? Uses and effective construction methods
Gross income = Total revenue – Cost of goods sold
Gross income is sometimes called gross margin. A company’s gross income shows how much money it made for its products or services after deducting direct costs. to create a product or provide a service.
