The part of National Income (NI) which is received by households is known as Personal Income (PI). Out of NI, which is earned by the firms and government enterprises, a part of profit is not distributed among the factors of production. This is called Undistributed Profits (UP) So, Personal income (PI) is defined as being equal to NI – Undistributed profits – Net interest payments made by households – Corporate tax + Transfer payments to the households from the government and firms