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

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

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

Answer: (A)

Income before any deductions is described as gross. This is the total earnings from work—wages or salary, plus overtime or bonuses—before taxes, retirement contributions, insurance, and other withholdings are taken out. Net pay is what you receive after those deductions. A salary and wages are forms of compensation, but they refer to the type of pay, not the stage of deduction; the term that specifically means the amount earned before deductions is gross. For example, if your gross pay is $4,000 and $900 is withheld in taxes and benefits, your net pay would be $3,100.

Income before any deductions is described as gross. This is the total earnings from work—wages or salary, plus overtime or bonuses—before taxes, retirement contributions, insurance, and other withholdings are taken out. Net pay is what you receive after those deductions. A salary and wages are forms of compensation, but they refer to the type of pay, not the stage of deduction; the term that specifically means the amount earned before deductions is gross. For example, if your gross pay is $4,000 and $900 is withheld in taxes and benefits, your net pay would be $3,100.