Gross Income
Definition
Your total income before any deductions — taxes, benefits, 401(k), health insurance. Your W-2 shows gross income at the top. Your take-home (net income) is what arrives in your bank account after deductions.
Why It Matters
Lenders use gross income to qualify you for loans. Budgeting requires net income. Understanding the difference prevents confusion when you see different numbers on offers vs paychecks.
Example
Gross salary: $75,000 per year. Minus: $12,000 federal tax, $4,500 Social Security and Medicare, $5,000 health insurance, $4,000 401(k). Net pay: ~$49,500. Your gross is $75,000 but you see ~$4,125 per month in take-home.