The MoneyReady Forum
Posts: 58

What is the definition of External income on the report and how is it calculated?

Posts: 234

What we call ‘EXTERNAL INCOME’ represents the total of your entered INCOMES, CPP, OAS, and other calculated government benefits (CCB for example), pretax.  It will also include net withdrawals from Wallet account(s) but it does not include withdrawals from other accounts. It does not include investment income and is not used to calculate taxes.

It’s a derived value, not used in calculations, it is itself calculated indirectly:

External  income = Net income + Taxes

Net income = Spending + Savings

Savings = sum of all net deposits to accounts

I used to call it Gross income, and used to show Net income, but that seemed to be very confusing for many. I just made those change to the TIME TABLE, the year reports and full report  last week in an effort to clarify. I came up with the name EXTERNAL INCOME in contrast to the added column ACCOUNT WITHDRAWALS, which is income from your own internal resources (your accounts).  Let me know if anything is still not clear or have suggestions to improve the reporting,