When all the amount of money you earn, regardless of how it’s made, is added up (before deductions, including taxes), the resulting sum of all those parts is your gross personal income. Bankrate offers up the example of an hourly wage earner who works out gross income by taking an hourly salary rate and multiplying that by the number of hours earned.
Gross income may be a bit more difficult to figure out when you’re a member of today’s gig economy, but all you need to remember is that money earned through different part-time, temporary, or freelance jobs all add up to become your gross income. American Express also says it’s important to know what your gross income is because it plays a role in helping you figure out whether or not you qualify for a loan or are able to rent the apartment of your dreams. Gross income also impacts the limits of your credit and how you might approach negotiating your salary for a new job.
But gross income is calculated a bit differently when you’re an entrepreneur because as a small business owner, your gross income represents the total amount of money you might have made from sales of goods and/or services within a specific amount of time, and without any deductions.