Taxable Income
Also called: taxable earnings
Taxable income is what's left after every deduction you're entitled to, and it's the figure your tax brackets are actually applied to. It is usually far below gross pay: a US single filer earning $70,000 who takes only the standard deduction is taxed on roughly $55,000. Every deduction, retirement contribution and pre-tax benefit works by lowering this number, which is why two people with identical salaries can owe very different tax.
Formula
Taxable income = Gross income − Adjustments − Deductions