National Income Calculator
Calculate national income using the income approach (wages, rent, interest, profit) or the expenditure approach (GDP minus depreciation and indirect taxes).
What Is National Income?
National Income (NI) is the total income earned by a country’s residents from producing goods and services in a given year. It is a core concept in macroeconomics — closely related to GDP but measured differently.
Two Approaches
1. Income Approach
NI = Wages + Rent + Interest + Profit + Proprietors’ Income
Every dollar spent on goods and services becomes income to someone. This approach adds up all the income earned: worker wages, landlord rents, lender interest, business profits, and self-employment income.
2. Expenditure Approach (from GDP)
NI = GDP − Capital Consumption Allowance (Depreciation) − Indirect Business Taxes + Net Foreign Factor Income
Where:
- GDP = Total market value of all goods and services produced
- CCA = Depreciation of physical capital (machinery, buildings)
- Indirect Business Taxes = Sales taxes, excise taxes paid by businesses
- Net Foreign Factor Income = Income earned by residents abroad minus income earned by foreigners domestically
GDP → NNP → NI
National Income sits in a chain of related measures:
- GDP − Depreciation = Net National Product (NNP)
- NNP − Indirect Business Taxes + Statistical Discrepancy = National Income
Largest Components (US, typical shares)
| Component | Share of NI (approx.) |
|---|---|
| Wages and Salaries | 55–60% |
| Proprietors’ Income | 8–10% |
| Corporate Profits | 10–12% |
| Net Interest | 5–8% |
| Rental Income | 3–5% |
Wages dominate because labor is the largest factor of production in modern economies.