Personal Income


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."

BREAKING DOWN '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.

  1. Adjusted Gross Income - AGI

    A measure of income calculated from your gross income and used ...
  2. Income Tax

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

    The amount of money that households have available for spending ...
  4. Downshifting

    The act of reducing one's standard of living for an improved ...
  5. Tip Income

    Income that a service professional earns that is not part of ...
  6. Discretionary Income

    The amount of an individual's income that is left for spending, ...
Related Articles
  1. Economics

    5 States with the Highest GDP Per Capita

    Learn about the top five states ranked by their real gross domestic product (GDP) per capita as of 2014: Alaska, North Dakota, New York, Connecticut and Wyoming.
  2. Taxes

    5 States Without Sales Tax

    Learn about the five states that do not charge sales taxes and about other taxes the states levy instead in order to generate revenue.
  3. Entrepreneurship

    10 Ways to Make Money on the Side

    Learn about 10 different things you can do on the side to add to the income you receive from your regular job or while you're looking for full-time work.
  4. Entrepreneurship

    The 6 Best Cities to Open a Restaurant in the US

    Understand what a restaurant owner should consider when thinking about starting a restaurant. Learn about the top six U.S. cities to start a restaurant.
  5. 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.
  6. 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.
  7. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  8. 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.
  9. Options & Futures

    Budget Without Blowing Off Your Friends

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

    Capital Gains Tax 101

    Find out how taxes are applied to your investment returns and how you can reduce your tax burden.
  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 mutual fund managers make money?

    Mutual fund managers get base salaries, which vary greatly depending on the size and pedigree of the fund company. They may ... Read Full Answer >>
  3. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  4. Do financial advisors need to meet quotas?

    Most financial advisors are required to meet quotas, particularly if they work for firms that pay base salaries or draws ... Read Full Answer >>
  5. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
  6. What is the range of deductibles offered with various health insurance plans?

    A wide range of possible deductibles are available with health insurance plans, starting as low as a few hundred dollars ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center