Gross income is the total amount of money a person earns before any taxes, deductions, or other withholdings are applied.
This includes wages or salary, bonuses, tips, rental income, interest, and any other earnings. It serves as the starting point for calculating taxes and determining eligibility for loans or financial aid.
Gross income differs from net income, which is the amount actually received after all deductions are taken out. Because deductions like federal and state taxes, social security, and retirement contributions are subtracted from gross income, it will always be higher than net income.
Understanding gross income is key for budgeting and financial planning.