Personal Income

AAA

DEFINITION of 'Personal Income'

Total compensation received by an individual. Personal income includes compensation from a number of sources - salaries, wages and bonuses received from employment or self-employment; dividends and distributions received from investments; rental receipts from real estate investments; profit-sharing from a business and so on. In most jurisdictions, personal income above a certain exemption threshold is subject to taxation. Personal income is generally computed on a pre-tax basis.


Also referred to as "gross income."

INVESTOPEDIA EXPLAINS 'Personal Income'

Personal income determines consumer consumption, and since consumer spending drives much of the economy, trends in personal income on a quarterly and annual basis are closely tracked by national statistical organizations, economists and analysts.


Personal income tends to display a rising trend during periods of economic expansion, and show a stagnant or slightly declining trend during recessionary times.


Since the 1980s, rapid economic growth in economies such as China, India and Brazil has spurred substantial increases in personal incomes for millions of their citizens.

RELATED TERMS
  1. Income Tax

    A tax that governments impose on financial income generated by ...
  2. Disposable Income

    The amount of money that households have available for spending ...
  3. Adjusted Gross Income - AGI

    A measure of income used to determine how much of your income ...
  4. Tip Income

    Income that a service professional earns that is not part of ...
  5. Downshifting

    The act of reducing one's standard of living for an improved ...
  6. Discretionary Income

    The amount of an individual's income that is left for spending, ...
RELATED FAQS
  1. Are capital gains taxed differently in different countries?

    Capital gains are taxed quite differently in different countries. Some countries charge no capital gains tax. Most do include ... Read Full Answer >>
  2. How do I use the rule of 72 to estimate compounding periods?

    The rule of 72 is best used to estimate compounding periods that are factors of two (2, 4, 12, 200 and so on). This is because ... Read Full Answer >>
  3. How much risk is associated with subprime mortgages?

    A large amount of risk is associated with subprime mortgages. Since the mortgages are specifically for people who do not ... Read Full Answer >>
  4. How is marginal propensity to save calculated?

    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  5. What is the difference between induced consumption and autonomous consumption?

    The first step to determining the difference between autonomous and induced consumption is to look at what each of these ... Read Full Answer >>
  6. How does stratified random sampling influence government policy decisions?

    Governments use various analytical techniques to examine the potential costs and benefits of policy options. One of those ... Read Full Answer >>
Related Articles
  1. Retirement

    The 5% Solution To Financial Freedom

    How can you save the recommended 10% of your income? We'll show you how to get there.
  2. Economics

    The Gini Index: Measuring Income Distribution

    A country with $100 billion in assets and four residents sounds good - unless three of them have $0.
  3. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  4. Bonds & Fixed Income

    The History Of The T-Bill Auction

    Learn how the U.S. found the perfect solution to its debt problems and ended up creating one of the largest markets in the world.
  5. Options & Futures

    Budget Without Blowing Off Your Friends

    With a little planning, you can maintain your social life without breaking the bank.
  6. Taxes

    Capital Gains Tax 101

    Find out how taxes are applied to your investment returns and how you can reduce your tax burden.
  7. Budgeting

    The Adverse Effects of Cheap Gas

    While low gas prices are welcomed, smart budgeters must anticipate future price hikes and consider the impact of low gas prices on investments and taxes.
  8. Budgeting

    Top 6 Best Value Hotels

    Here are the top value hotels across America, most of which can be had for less than $100 per night and less than $50 per night if booked in advance.
  9. Personal Finance

    More Bonuses And Fewer Raises Affect Workers

    Companies are increasingly replacing salary increases with bonuses, much to the detriment of employees.
  10. Investing Basics

    Calculating Unlevered Free Cash Flow

    Unlevered free cash flow (UFCF) is the free cash flow of a business before interest payments.

You May Also Like

Hot Definitions
  1. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  2. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  3. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  4. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  5. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  6. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!