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Gross Income: Definition and How to Calculate It
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do not influence our editors’ opinions or ratingsWhat Is Gross Income? Example and How to Calculate It
Gross income is a tally of all your earnings pre-tax. Here's how to figure it and how it differs from net income and adjusted gross income.
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6 years of experience Expertise Investing for beginners financial advice long-term investingAlana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch.
Alana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch. Published in Editor & Content Strategist + more + more
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Expertise Taxes InvestingSabrina Parys is an editor and content strategist on the taxes and investing team at NerdWallet, where she manages and writes content on personal income taxes. Her previous experience includes five years as a copy editor and associate editor in academic and educational publishing. She is based in Brooklyn, New York.
Sabrina Parys is an editor and content strategist on the taxes and investing team at NerdWallet, where she manages and writes content on personal income taxes. Her previous experience includes five years as a copy editor and associate editor in academic and educational publishing. She is based in Brooklyn, New York. Published in Editor & Content Strategist + more + moreGross income definition
Gross income definitionGross income is the total amount of money you earn — such as your wages from a job or profits you might make from selling a stock — before taxes. Business and retirement income, tips, rents and any interest earned are all considered income by the IRS
Gross income is the total amount of money you earn — such as your wages from a job or profits you might make from selling a stock — before taxes. Business and retirement income, tips, rents and any interest earned are all considered income by the IRS Internal Revenue Service. Adjusted Gross Income. .You may need to know your gross income if you want to apply for a loan or an apartment. Your gross income is also the starting basis for calculating how much you owe in federal taxes.
You may need to know your gross income if you want to apply for a loan or an apartment. Your gross income is also the starting basis for calculating how much you owe in federal taxes.» MORE: How tax brackets and rates work
» MORE: » MORE: How tax brackets and rates work AD Owe $10,000+ or More? This Tax Season Could Be Your Chance to Qualify Each year the IRS writes off millions in tax debt, yet few have applied. Learn moreon Anthem Tax Services' website
AD Let’s resolve your tax issues: Tax Relief & Resolution Services for IRS Tax Debt Certified Enrolled Agents, CPAs, and Tax Attorneys on your case. Learn moreon TaxRise's website
How to calculate gross income
How to calculate gross incomeTo figure out what your gross income is, simply add up all the different forms of income you have. For example, if you have only one W-2 job and no other income, your annual gross income equals your annual wages before taxes and deductions are applied. If you have multiple jobs and some investment gains, you’ll need to review all of your pre-tax wages and total capital gains for the year, and then add all of them together.
To figure out what your gross income is, simply add up all the different forms of income you have. For example, if you have only one W-2 job and no other income, your annual gross income equals your annual wages before taxes and deductions are applied. If you have multiple jobs and some investment gains, you’ll need to review all of your pre-tax wages and total capital gains for the year, and then add all of them together.Good tax software can help you add up all your forms of income, from W-2 income to capital gains to dividends. For tax purposes, there are also some things that may not count as gross income, such as gifts or some types of inheritances, but see a tax pro to be sure.
Good tax software can help you add up all your forms of income, from W-2 income to capital gains to dividends. For tax purposes, there are also some things that may not count as gross income, such as gifts or some types of inheritances, but see a tax pro to be sure.Gross monthly income example
Gross monthly income exampleSay you have two jobs. If you receive a paycheck twice a month from your first job for $1,500 each (equaling $3,000 a month before taxes), and you work two nights a week at a restaurant for $100 per night plus tips ($800 per month plus a variable $500 in tips, also before taxes), your gross income would equal $4,300 for that month.
Say you have two jobs. If you receive a paycheck twice a month from your first job for $1,500 each (equaling $3,000 a month before taxes), and you work two nights a week at a restaurant for $100 per night plus tips ($800 per month plus a variable $500 in tips, also before taxes), your gross income would equal $4,300 for that month.Gross income vs. net income
Gross income vs. net incomeNet income is just your gross income minus your total expenses, taxes and deductions. Net income is effectively your take-home pay — the money you actually get in your pocket — which may make it a more helpful number for personal budgeting than gross income.
Net income is just your gross income minus your total expenses, taxes and deductions. Net income is effectively your take-home pay — the money you actually get in your pocket — which may make it a more helpful number for personal budgeting than gross income.Gross income vs. adjusted gross income
Gross income vs. adjusted gross incomeThe main difference between gross income and adjusted gross income is that gross income is essentially all of your income, whereas adjusted gross income is all your income minus particular deductions or “adjustments,” such as contributions to traditional IRAs, student loan interest and educator expenses.
The main difference between gross income and adjusted gross income is that gross income is essentially all of your income, whereas adjusted gross income is all your income minus particular deductions or “adjustments,” such as contributions to traditional IRAs , student loan interest and educator expenses. AD Owe $10,000+ or More? This Tax Season Could Be Your Chance to Qualify Each year the IRS writes off millions in tax debt, yet few have applied. Learn moreon Anthem Tax Services' website
AD Let’s resolve your tax issues: Tax Relief & Resolution Services for IRS Tax Debt Certified Enrolled Agents, CPAs, and Tax Attorneys on your case. Learn moreon TaxRise's website
How to get help
How to get helpDoing your taxes and sorting through all the terminology can be daunting, but working with tax software or a tax professional can make it much easier.
Doing your taxes and sorting through all the terminology can be daunting, but working with tax software or a tax professional can make it much easier.» Check out the best tax software
» » Check out the best tax softwareHelpful resources
Helpful resources How Federal Tax Brackets and Rates Work Capital Gains Tax: Long and Short-Term Rates for 2025-2026 How to Fill Out Your W-4 Form and When to Adjust It More like this Taxes 2026 Tax Brackets and Federal Income Tax Rates The IRS adjusts the federal tax brackets annually to keep pace with inflation. The 2026 tax brackets apply to taxes filed in 2027. Bella Avila Standard Deduction for 2025 and 2026: Amounts, When to Take The standard deduction is a popular way for taxpayers to reduce their taxable income. Your deduction amount depends on your age, filing status and other factors. 2 By Sabrina Parys, Tina Orem Capital Gains Tax: Long and Short-Term Rates for 2025-2026 Capital gains are the profits from the sale of assets. They can be subject to short-term or long-term tax rates. 2 By Sabrina Parys, Tina Orem 25 Popular Tax Deductions and Tax Breaks for 2025-2026 A deduction cuts the income you're taxed on, which can mean a lower bill. A credit cuts your tax bill directly. Learn more about common tax breaks and write-offs — and how to claim them. 2 By Sabrina Parys, Tina Orem Federal Income Tax Calculator and Refund Estimator 2025-2026 Estimate your 2026 tax refund or bill using our free income tax calculator. Enter your income, age and filing status to get started. Sabrina Parys How Federal Tax Brackets and Rates Work Contrary to popular belief, your income isn't taxed at just one rate. The U.S. has a progressive tax system, meaning different portions of your income get taxed at different rates. 2 By Sabrina Parys, Tina Orem 2025 Tax Brackets and Federal Income Tax Rates The 2025 federal income tax rates range from 10% to 37% and apply to taxes due by April of this year. Find out which bracket you're in. Bella Avila 2026 Tax Brackets and Federal Income Tax Rates The IRS adjusts the federal tax brackets annually to keep pace with inflation. The 2026 tax brackets apply to taxes filed in 2027. Bella Avila Standard Deduction for 2025 and 2026: Amounts, When to Take The standard deduction is a popular way for taxpayers to reduce their taxable income. Your deduction amount depends on your age, filing status and other factors. 2 By Sabrina Parys, Tina Orem Capital Gains Tax: Long and Short-Term Rates for 2025-2026 Capital gains are the profits from the sale of assets. They can be subject to short-term or long-term tax rates. 2 By Sabrina Parys, Tina Orem 25 Popular Tax Deductions and Tax Breaks for 2025-2026 A deduction cuts the income you're taxed on, which can mean a lower bill. A credit cuts your tax bill directly. Learn more about common tax breaks and write-offs — and how to claim them. 2 By Sabrina Parys, Tina Orem Federal Income Tax Calculator and Refund Estimator 2025-2026 Estimate your 2026 tax refund or bill using our free income tax calculator. Enter your income, age and filing status to get started. Sabrina Parys How Federal Tax Brackets and Rates Work Contrary to popular belief, your income isn't taxed at just one rate. The U.S. has a progressive tax system, meaning different portions of your income get taxed at different rates. 2 By Sabrina Parys, Tina Orem 2025 Tax Brackets and Federal Income Tax Rates The 2025 federal income tax rates range from 10% to 37% and apply to taxes due by April of this year. Find out which bracket you're in. Bella Avila 2026 Tax Brackets and Federal Income Tax Rates The IRS adjusts the federal tax brackets annually to keep pace with inflation. The 2026 tax brackets apply to taxes filed in 2027. Bella Avila Standard Deduction for 2025 and 2026: Amounts, When to Take The standard deduction is a popular way for taxpayers to reduce their taxable income. Your deduction amount depends on your age, filing status and other factors. 2 By Sabrina Parys, Tina Orem Capital Gains Tax: Long and Short-Term Rates for 2025-2026 Capital gains are the profits from the sale of assets. They can be subject to short-term or long-term tax rates. 2 By Sabrina Parys, Tina Orem 25 Popular Tax Deductions and Tax Breaks for 2025-2026 A deduction cuts the income you're taxed on, which can mean a lower bill. A credit cuts your tax bill directly. Learn more about common tax breaks and write-offs — and how to claim them. 2 By Sabrina Parys, Tina Orem Get started Get startedon Anthem Tax Services's website
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