Define: Annualization

UK Accounting Glossary

Definition: Annualization

Quick Summary of Annualization

Annualization is a tool which is used to predict the annual amount of something using only the data from part of the year.

What is the dictionary definition of Annualization?

Dictionary Definition

A procedure that is used in the USA whereby you multiply the taxable earnings of a month by 12 then divide it by the number of months involved to provide a monthly amount. Annualization as a procedure is specified by the Internal Revenue Code.


Full Definition of Annualization

Annualization is a predictive tool that estimates the amount or rate of something for an entire year, based on data from part of a year. This tool is primarily used for taxes and investments. If you’re paying estimated taxes, you’ll need to annualize your income to determine how much tax to pay.


Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Annualization. Payroll & Accounting Heaven Ltd. November 17, 2019
Chicago Manual of Style (CMS):
Annualization. Payroll & Accounting Heaven Ltd. (accessed: November 17, 2019).
American Psychological Association (APA):
Annualization. Retrieved November 17, 2019, from website:

Definition Sources

Definitions for Annualization are sourced/syndicated from:

This glossary post was last updated: 4th February 2019.