Gross income is the income of an individual or business before payroll taxes are deducted. A typical employer deducts an employee's federal, state and local tax amounts from gross income, which leaves net income as the take-home pay amount.
In addition to conventional payroll checks, a person may generate gross income through rental properties, self-employment and investments, according to About. In these cases, the person is responsible for making estimated tax payments to the IRS. Some pretax income disbursements are allowed, which minimize an employee's tax burden on gross income. Many employees have pretax health insurance and retirement contributions held, for instance.