Annual income(can be referred in 2 ways: gross annual income/ net annual income） refers to the amount of income you earn in one fiscal year. Your annual income includes your yearly salary, bonuses, commissions, overtime, and tips earned.
As for gross annual income, it indicates your earnings before tax deducted, while net annual income is the amount you’re left with after tax deductions. It is important if you’re a wage earner or a business owner, especially when it comes to filing your taxes and applying for loans. You’ll totally need your net annual income and household income in situations when it comes to create a budget, apply for a loan, or prove child support and alimony.
What Does It Include in Detail?
To be more detailed, annual income includes:
● Annual base salary: wages, salary, overtime pay, commissions, and tips or bonuses before deductions
● Social security, retirement funds, or pensions
● Welfare or disability assistance
● Court-ordered alimony or child support payments
● Net income from operating a business or a second job
● Interest, dividends, and any other net income from properties
Annual salary vs. annual income: What Is the Difference
Are you always confused by two concepts, annual salary and annual income? An annual salary is the one paid by your employer, or the company you work for. It’s normally a yearly salary paid over 12 months, hence the term annual. On the other hand, your annual income refers to the total amount of money you earn over the whole year.
How to Calculate
Generally, you can calculate your annual income with some very simple formula, which is to convert your hourly, daily, weekly, or monthly wages with the formula below to get your annual income.
Hourly: rate x 2,000
Daily: rate x 250
Weekly: rate x 50
Monthly: rate x 12
But what you should know is that : this formula assumes you work an average of 40 hours per week and 50 weeks per year in advanced.
Annual Income at Different Age
The data, obtained by the U.S. Bureau of Labor Statistics (BLS), is measured by several demographic factors, including age. These figures apply to full-time workers in every age group.
1.Average annual salary from age 16-19
The minimum wage by age group is made up entirely of teenagers, many of whom only work in summer jobs. According to the BLS, the average wage for 16- to 19-year-olds is $448.50 per week and $23,322 per year. This is an average across all races, genders and education levels.
2.Average salary from age20-24
Earnings increase starting in the 20s, an age group that includes some new college graduates. The average salary for 20- to 24-year-olds is $572.50 per week, which equates to $29,770 per year. Many Americans start their careers in their 20s and don’t earn as much as they could in their 30s.
3.Average salary from age 25-34
For Americans ages 25-34, the average wage is $806.75 per week, or $41,951 per year. That’s a big jump from the average salary for 20-24 year olds. Earnings typically increase in your 20s and 30s as you progress through promotions and raises. This age group also includes many who have earned professional degrees from graduate school, raising the average even further.
4.Average salary from age 35-44
The average salary for 35 to 44-year-olds is $986 per week or $51,272 per year. However, this figure masks huge gender differences. For example, men between the ages of 35 and 44 earned an average of $1,101.25 a week, while women in the same age group earned an average of $876.25 a week.
5.Average salary from age 45-54
Income begins to plateau in the 40s. The average salary for 45 to 54-year-olds is $1,002.75 per week or $52,143 per year. This is the highest average salary of any age group tracked by the BLS. Likewise, there is a large gender pay gap in this age group. Men between the ages of 45 and 54 earned an average of $1,137 a week, while women in the same age group earned an average of $875 a week.
6.Average salary from age 55-64
The average salary for Americans in the 55-64 age group is $994.50 per week and $51,714 per year. Earnings in this age group are slightly lower than those in the 45-54 age group. The total number of workers also decreased in this age group. According to the U.S. Bureau of Labor Statistics, there are 25,565,250 full-time workers in the 45-54 age group compared to 19,584,500 in the 55-64 age group.
Many people start leaving work when they turn 62 and qualify for Social Security benefits (though it’s better to wait longer to take full advantage of them).
7.Average salary from age 65 years old and above
Americans 65 and older earn an average of $936.25 a week and an average of $48,685 a year. This average is for full-time employees, so it doesn’t take into account that many people in this age group drop out of the workforce to start earning income from Social Security and their retirement savings. Full-time workers aged 65 and over were 4,662,250. Some workers over 65 may be in the workforce because they don’t have enough savings.