Personal Income

A A A

DEFINITION

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 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. Disposable Income

    The amount of money that households have available for spending and saving after ...
  2. Downshifting

    The act of reducing one's standard of living for an improved quality of life. ...
  3. Adjusted Gross Income - AGI

    A measure of income used to determine how much of your income is taxable. Adjusted ...
  4. Income Tax

    A tax that governments impose on financial income generated by all entities ...
  5. Tip Income

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

    The amount of an individual's income that is left for spending, investing or ...
  7. Foreign remittance

  8. Debt Consolidation

    The act of combining several loans or liabilities into one loan. Debt consolidation ...
  9. Personal Spending Plan

    Similar to a budget, a personal spending plan helps outline where income is ...
  10. Golden Bungee

    A benefit conferred to select top executives that is a combination of a lucrative ...
Related Articles
  1. The History Of The T-Bill Auction
    Bonds & Fixed Income

    The History Of The T-Bill Auction

  2. Budget Without Blowing Off Your Friends
    Options & Futures

    Budget Without Blowing Off Your Friends

  3. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  4. Capital Gains Tax 101
    Taxes

    Capital Gains Tax 101

  5. The 5% Solution To Financial Freedom
    Retirement

    The 5% Solution To Financial Freedom

  6. The Gini Index: Measuring Income Distribution
    Economics

    The Gini Index: Measuring Income Distribution

  7. 5 Things You Shouldn't Do During A Recession
    Budgeting

    5 Things You Shouldn't Do During A Recession

  8. Banker Or Broker: Which Career Is Right ...
    Professionals

    Banker Or Broker: Which Career Is Right ...

  9. A Day Without Spending, A Lifetime's ...
    Budgeting

    A Day Without Spending, A Lifetime's ...

  10. Debt Consolidation: When It Helps, When ...
    Credit & Loans

    Debt Consolidation: When It Helps, When ...

comments powered by Disqus
Hot Definitions
  1. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  2. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
  3. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  4. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  5. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  6. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
Trading Center