What is the National Income (NI) Calculator?
This tool computes National Income (NI) — the total income actually received by a nation's residents — from Gross Domestic Product (GDP). While GDP measures the value added produced within a country's borders (a production-side measure), National Income is an income-side measure of what the nation's people earn. The calculator follows the standard System of National Accounts arithmetic and applies universally; it is not tied to any single country.
How to use it
Enter five amounts, all expressed in the same currency and the same scale (for example all in trillion yen, or all in billion USD): GDP, net factor income from abroad, depreciation, indirect taxes, and subsidies. The calculator does not convert currencies or scales, so consistency is the only requirement. Net factor income from abroad may be negative if a country pays more factor income abroad than it receives.
The formula explained
The conversion happens in three steps. First, \(\text{GNP} = \text{GDP} + \text{Net Factor Income from Abroad}\) (equivalently GNI). Second, \(\text{NNP} = \text{GNP} - \text{Depreciation}\), removing the capital consumption allowance. Third, \(\text{NI} = \text{NNP} - \text{Indirect Taxes} + \text{Subsidies}\), which restates the figure from market prices to factor cost. Combined into one identity:
$$\text{NI} = \text{GDP} + \text{NFIA} - \text{Depreciation} - \text{Indirect Taxes} + \text{Subsidies}$$No division occurs, so there is no divide-by-zero risk.
Worked example
Suppose GDP = 500, net factor income from abroad = 20, depreciation = 80, indirect taxes = 40, and subsidies = 10 (all in trillion units). Then \(\text{GNP} = 500 + 20 = 520\); \(\text{NNP} = 520 - 80 = 440\); and
$$\text{NI} = 440 - 40 + 10 = 410 \text{ trillion units}$$
FAQ
I only know GNP, not GDP — can I still use this? Yes. Set GDP equal to GNP and set net factor income from abroad to 0, since \(\text{GNP} = \text{GDP} + \text{net factor income from abroad}\).
What if I already have NNP at factor cost? Set indirect taxes and subsidies both to 0; the indirect-taxes-net-of-subsidies term is just the market-price-to-factor-cost wedge.
Can values be negative? Net factor income from abroad can certainly be negative, and the identity still holds. The other components are normally non-negative in practice.
