personal income

noun
Updated on: 13 Oct 2017

Definition of personal income

: the current income received by persons from all sources excluding transfers among persons used especially in national income accounting

There's more!

Love words? You must — there are over 200,000 words in our free online dictionary, but you are looking for one that’s only in the Merriam-Webster Unabridged Dictionary.

Start your free trial today and get unlimited access to America's largest dictionary, with:

  • More than 250,000 words that aren't in our free dictionary
  • Expanded definitions, etymologies, and usage notes
  • Advanced search features
  • Ad free!
Already a subscriber? Log in.

Financial Definition of PERSONAL INCOME

personal income

What It Is

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.

How It Works

Personal income is used in calculating adjusted gross income (AGI) -- which is important to individuals for income-tax purposes.

It is also an essential measure to investors because it serves as an indicator of future demand for both goods and services in the market. If personal income is high, there could be more money spent in the economy, indicating a future business boom.

Why It Matters

National personal income levels are very closely linked to the Gross Domestic Product (GDP), and they serve as a key indicator on consumer spending, inflationary pressures, the overall economy and markets.

Income statistics also provide an excellent indicator for socioeconomic disparities and inequalities that could threaten the stability of the economy down the road -- and consequently pose risks for the long-term prospects of the markets.


Seen and Heard

What made you want to look up personal income? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!