The full explanation
Lenders use it to figure your debt-to-income ratio (DTI): they add up your monthly debt payments and divide them by your gross monthly income. When you apply for a mortgage, your annual pre-tax income can include full-time or part-time work, self-employment, tips, commissions, overtime and bonuses; the lender looks at whether you can reasonably expect that income to continue.
An example
Marta's pay stub shows the total she earned for the month and, separately, what was taken out. To figure her DTI, the lender uses the total before deductions: her gross income.
With real numbers
Computed with official data for the whole U.S. In your county the numbers may differ.
- Typical income per year
- $80,734
- Per month, before taxes
- $6,728
The typical U.S. household earns $80,734 a year before taxes, about $6,728 a month. That is gross income: what you keep after taxes is less.
Computed with: American Community Survey (ACS) 5-year estimates (2020–2024)
In numbers: gross income
Typical household income: the national figure and some of the 52 states, from highest to lowest, with the same source and the same date.
- Nationwide
- $80,734
| State | Figure | vs. US |
|---|---|---|
| District of Columbia | $109,870 | +36% |
| Minnesota | $89,062 | +10% |
| Georgia | $77,353 | −4.2% |
| Indiana | $71,957 | −11% |
| Puerto Rico | $26,297 | −67% |
If a document mentions "gross income", think of these figures: in the District of Columbia it is $109,870; in Puerto Rico, $26,297; nationwide, $80,734.
Sources: American Community Survey (ACS) 5-year estimates (Average 2020–2024)
Where you see it on the site
You will see it in…
- Your pay stub, as gross pay
- The mortgage application, in the income section
- The calculation of your debt-to-income ratio (DTI)
