Annual income is the total amount of money earned by a person over a one-year period before deductions.
How to Calculate Annual Income?
Annual income is the sum of all forms of compensation, or sources of income, received by a person over a one-year period. To accurately calculate annual income, all sources of income should be taken into consideration.
Common sources of income include:
- Employment wages and salary;
- Commissions, overtime pay, bonuses;
- Self-employment income;
- Capital gains;
- Pension and social security;
- Child support and alimony;
- Disability and welfare;
- Income and interest from investments;
- Income from rental of properties.
What Is the Difference Between Annual Income and Gross Income?
Annual income represents the total amount of money earned by a person over a one-year period, after deductions, whereas gross income represents this amount before deductions.