Gross income, often referred to simply as "gross," represents the total income an individual or business earns before subtracting taxes, expenses, or other deductions. For personal finances, this commonly includes salaries, wages, bonuses, and other forms of income. For businesses, gross income typically starts with the total revenue generated from sales or services, from which the cost of goods sold (COGS) is subtracted to arrive at the figure. For example, if an individual earns $50,000 per year and receives $5,000 in bonuses, their gross income would be $55,000. Similarly, if a company generates $500,000 in revenue and incurs $200,000 in costs, its gross income would be $300,000. Understanding gross income is important for budgeting and financial planning, as it provides a baseline measure of earning before any financial responsibilities, such as taxes or operational costs, are taken into account.