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What is Gross Income?

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You may have heard different terminology regarding the income that you receive. One of the common questions that derives from this is, “What is Gross Income?”

Personal Finances

Gross Income is actually very simple. If you are an employee, your gross income is simply the amount of money you receive before taxes.

Corporation

If you are a corporation or business, then your gross income  is the revenue produced minus the cost of good sold. This is also referred to as gross margin or gross profit.

What is Gross Income?

How do I Increase my Gross Income?

There are a few ways you could increase your gross income:

  1. Work more hours at your current job
  2. Earn a raise
  3. Work a 2nd job
  4. Start a side business
  5. If you already have a business, increase your sales

Have you successfully improved your gross income? What effect did this have on your life?

Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

15 Comments

  1. I work a second job. I recently got a raise at that job. It’s not much because I only work there about 9 hours a week.
    That’s ok, because my goal was to make myself ask for the raise and I did.

    • Nice work Sharon! Asking for a raise is often tough to do. That must have been a proud moment! 🙂

  2. This school year I was able to increase my gross income, but not so sure for next year. Next year is questionable because of the state budget problems.

    • Good job increasing your income! I am attempting to increase our income as well (somewhat with this site), but it sure is tough! 🙂 I always love a good challenge though.

  3. I’m trying my hand at blogging as a side income, almost at the $100 adsense thresh-hold woo hoo! Alongside that, my next goal is to get a big pay raise. It may mean putting in the extra hours (I’m salary 🙁 but it will be worth it. Nice, clear and concise explanation brotha!

    • Nice job with the Adsense earnings! I think I’m sitting at $47, but I haven’t put much effort towards it, and I actually took it off my homepage because it looks to “ad focused”. Keep it up with the blog!

  4. Another way to think of it: if you are an employee, gross income is the amount you make before taxes AND before deducting the “cost” of going to work (the cost of commuting, and buying a work wardrobe, and dropping the kids off at daycare). Net income comes after both taxes and your “cost of working” expenses.

  5. I need to work on increasing my gross income, but the past couple of years have been good: I graduated university and then got a full-time job, so I’ve had some healthy gains. Going forward, that’s why I’m interested in side income. The thing is our taxation rate really sucks so I put in $1 of effort and I’m lucky to get 50-60 cents out of it. 😉

  6. I really really liked the simple and clear cut way you described “gross” income. I sometimes forget that everyone doesn’t know what it is. Very useful information. I’m sticking it in my next round up.

    • Thanks Barb! Yeah, gross income is a very simple thing, but many still get confused between “net” and “gross” (even me!)

  7. A company’s revenue minus cost of goods sold. Also called “gross margin” and “gross profit”.

  8. With tax season up us, this was a well timed article. (At least reading the article at least) It is always nice to have a refresher on vocabulary before starting to fill out all those forms which ask about gross and net income.

    Thanks

    ~~Yvette

    • Very true. Glad it could help you out Yvette!


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