Income Calculation

Income calculation involves determining the total earnings received by an individual or entity over a specific period, usually a year. This includes wages, salaries, bonuses, interest, rental income, and any other sources of revenue. For individuals, income is typically categorized as gross income (total earnings before taxes and deductions) and net income (what remains after taxes and expenses are subtracted). For businesses, income includes sales revenue minus costs of goods sold and operating expenses, often represented as net profit. Understanding income calculation is crucial for budgeting, tax preparation, and financial planning.