All revenue received by all people or families in a country is referred to as personal income. Salary, wages, and bonuses obtained through job or self-employment, dividends and distributions received from investments, rental revenue from real estate investments, and profit-sharing from enterprises are all examples of personal income. Personal income has a significant impact on consumer spending. Personal income is tracked quarterly or annually by national statistics agencies, economists, and analysts since consumer spending drives most of the economy. During periods of economic boom, personal income tends to climb, whereas, during periods of recession, it tends to stagnate or drop somewhat.
Personal income, aka “before-tax income”, is the total annual gross earnings of an individual from all income sources, such as: salaries and wages, investment interest and dividends, employer contributions to pension plans, and rental properties.
Personal income is used in calculating adjusted gross income (AGI) – which is important to individuals for income-tax purposes.