Which term describes a person's income before any deductions?

Which term describes a person's income before any deductions?

• A. Net
• B. Gross
• C. Salary
• D. Wages

Answer: (B)

Income before any deductions is gross income. Gross income measures the total amount earned from wages, salaries, bonuses, and other earnings prior to withholding taxes, retirement contributions, insurance, and other deductions. Net income, by contrast, is what remains after those deductions and is typically called take-home pay. While salary and wages describe the form of compensation, they don’t by themselves specify the amount before deductions. For example, a paycheck might show $4,000 as gross earnings and $3,000 as net pay after deductions.

Income before any deductions is gross income. Gross income measures the total amount earned from wages, salaries, bonuses, and other earnings prior to withholding taxes, retirement contributions, insurance, and other deductions. Net income, by contrast, is what remains after those deductions and is typically called take-home pay. While salary and wages describe the form of compensation, they don’t by themselves specify the amount before deductions. For example, a paycheck might show $4,000 as gross earnings and $3,000 as net pay after deductions.