what is a annual income

Annual income is the total amount of money earned during a fiscal year. It can be expressed as annual gross income or annual net income. Gross annual income refers to all earnings before any deductions are made, while net annual income refers to the amount that remains after all deductions are made. For example, an employee who earns an annual salary of $50,000 is paid the same amount every two weeks, regardless of how many hours they worked each day in those two weeks. The individual’s gross income every two weeks would be $1,923 (or $50,000 divided by 26 pay periods). By contrast, an employee who is paid $25 per hour is paid $2,000 every two weeks only if they actually work 8 hours per day, 5 days per week ($25 x 8 x 5 x 2) . Annual income is part of an employee’s total compensation package, which combines an employee’s annual income with any financial benefits provided during the working period, such as commissions, bonuses, health and dental insurance, disability and life insurance, sick leave and paid time off, retirement plans, tuition and child care assistance.