HR Glossary / Annual Income

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.

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