Gross Income refers to the total earnings received by an individual or a business before deducting any taxes, expenses, or other adjustments. It represents the starting point for calculating net income and assessing overall financial performance.

For individuals, gross income includes all sources of earnings such as:

• Salary or wages
• Bonuses and commissions
• Interest and dividend income
• Rental income
• Capital gains
• Business or professional income

For businesses, gross income (often called gross profit) is calculated as:

Gross Income = Revenue ñ Cost of Goods Sold (COGS)

This figure shows how efficiently a company is producing and selling its goods or services before accounting for operating expenses, taxes, and interest.

Gross income is important because it provides a measure of total earning power and serves as the foundation for:

• Determining taxable income after allowable deductions
• Evaluating profitability trends
• Assessing financial stability and creditworthiness

In summary, Gross Income reflects the total inflow of money earned from all sources before any deductions ó making it a key metric in both personal finance and business accounting.