24 Hour Loans glossary of financial terms

Before-Tax Income

The income you earn will, if you earn over a certain amount, be subject to taxation and other deductions. Your before-tax income, quite simply, is the income you earn before these deductions are made. This is often called your gross income.

Your before-tax income won't just include your salary. It can also contain bonuses, commissions and employee benefits, for example. You can also earn before-tax income on the interest you receive from some savings accounts and investment returns. Basically, any money you earn and many benefits you are given by your employer will all go towards making up your overall before-tax income. In the UK individuals won?t be taxed on their entire before-tax income ? every tax payer has a tax allowance that can be applied to their income in any given tax year. So, this allowance will be deducted from your before-tax income and you will be taxed on the balance that remains.