Gross annual income is the total amount of money you earn in one fiscal year before any deductions such as taxes, retirement contributions, or other withholdings are taken out
. It includes all sources of income, not just wages or salary, but also commissions, overtime pay, pensions, welfare benefits, child support payments, income from investments, and other earnings
. To calculate gross annual income, you can:
- Multiply your gross monthly income by 12 if you have a consistent monthly salary
- Use the formula: (hourly wage) × (hours worked per week) × (weeks worked per year) if you are paid hourly and your hours vary
- Add any bonuses, commissions, or allowances to your base earnings to get the full gross amount
Gross annual income is important for budgeting, tax reporting, and qualifying for loans or credit, as it reflects your total earning capacity before deductions
. In summary, gross annual income is your total earnings before any deductions within a year, encompassing all income sources.
