In economics, personal income refers to the total earnings of an individual from various sources such as wages, investment ventures, and other sources of income. It encompasses all the products and money received by an individual.
Personal income can be defined in different ways:
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Nominal gross domestic product (GDP) per capita is the total value of a country's finished goods and services (gross domestic product) divided by its total population (per capita).
Gross domestic product per capita is often used as a proxy indicator an indicator of a country's standard of living; however, this is inaccurate because GDP per capita is not a measure of personal income and does not take into account social and environmental costs and benefits. Measures of personal income include average wage, real income, median income, disposable income and gross national income (GNI) per capita.
The median income is the income amount that divides a population into two groups, half having an income above that amount, and half having an income below that amount. It may differ from the mean (or average) income. Both of these are ways of understanding income distribution. Median income can be calculated by household income, by personal income, or for specific demographic groups. When taxes and mandatory contributions are subtracted from income, the result is called net or disposable income. The measurement of income from individuals and households, which is necessary to produce statistics such as the median, can pose challenges and yield results inconsistent with aggregate national accounts data. For example, an academic study on the Census income data claims that when correcting for underreporting, U.S. median gross household income was 15% higher in 2010 (table 3).
Disposable income is total personal income minus current taxes on income. In national accounting, personal income minus personal current taxes equals disposable personal income or household disposable income. Subtracting personal outlays (which includes the major category of personal [or private] consumption expenditure) yields personal (or, private) savings, hence the income left after paying away all the taxes is referred to as disposable income.
Restated, consumption expenditure plus savings equals disposable income after accounting for transfers such as payments to children in school or elderly parents' living and care arrangements.
In economics, and in other social sciences, preference refers to an order by which an agent, while in search of an "optimal choice", ranks alternatives based on their respective utility. Preferences are evaluations that concern matters of value, in relation to practical reasoning. Individual preferences are determined by taste, need, ..., as opposed to price, availability or personal income. Classical economics assumes that people act in their best (rational) interest. In this context, rationality would dictate that, when given a choice, an individual will select an option that maximizes their self-interest. But preferences are not always transitive, both because real humans are far from always being rational and because in some situations preferences can form cycles, in which case there exists no well-defined optimal choice. An example of this is Efron dice.
The concept of preference plays a key role in many disciplines, including moral philosophy and decision theory. The logical properties that preferences possess also have major effects on rational choice theory, which in turn affects all modern economic topics.
Personal income is an individual's total earnings from wages, investment interest, and other sources. The Bureau of Labor Statistics reported a median weekly personal income of $1,196 for full-time workers in the United States in Q2 2025. For the year 2024, the U.S. Census Bureau estimates that the median annual earnings for all workers (people aged 15 and over with earnings) was $51,370; and more specifically estimates that median annual earnings for those who worked full-time, year round, was $63,360.
Income patterns are evident on the basis of age, sex, ethnicity and educational characteristics. In 2005 roughly half of all those with graduate degrees were among the nation's top 15% of income earners. Among different demographics (gender, marital status, ethnicity) for those over the age of 18, median personal income ranged from $3,317 for an unemployed, married Asian American female to $55,935 for a full-time, year-round employed Asian American male. According to the US Census, men tended to have higher income than women, while Asians and Whites earned more than African Americans and Hispanics.