- All the money you earn. This includes any wages, salaries, tips, net earnings (if you're self-employed) and any other income received for personal services. Investment income, such as dividends and interest, is not counted as earned income. See also "Unearned Income."
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Related Terms and Acronyms
- Active Income — Definition,
- Active income refers to wages, tips, and profits from your business or employment that you partake in. It also includes portfolio income such as interest and dividends, but you cannot usually offset active income with passive losses.
- Before-tax Income — Definition,
- Earnings before income taxes are paid.
- Earned Income Credit (EIC) — Acronym,
- Gross Income — Definition,
- Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.
- Gross Overtime — Definition,
- Overtime pay before taxes that is averaged over two years can be considered monthly income, but it must be over the two years or it does not count.
- Household Income (HHI) — Acronym, Important,
- The total income of all members of a household.
- Income — Definition,
- The money earned in a specific time period.
- Investment Income — Definition,
- Income that is earned from investments such as interest, dividends, and capital gains.
- Mixed-income Housing — Definition,
- A neighbourhood whose residents earn widely varying wages and salaries.
- Net Income (NI) — Acronym, Very Important,
- The difference between effective gross income and expenses. The term is qualified as net income before depreciation and debt.
- Ordinary Income — Definition,
- Income that does not qualify as a capital gain including wages, interest, dividends, and net income from a business.
- Personal Disposable Income — Definition,
- Personal income minus personal income tax payments. Also called "take-home pay."
- Profit — Definition,
- When revenues exceed expenses.
- Self Employed Person (SEP) — Acronym,
- A person who runs a trade or business, rather than working as an employee for someone else. You are self-employed if you are a sole proprietor or a partner working in a business. You can be an employee and self-employed at the same time if you have an independent business outside your regular employee hours. To qualify for many business tax exclusions and deductions, the enterprise must make a profit in three of five years. In most cases in order to qualify you must take and average of the last 2-3 years tax assessments.
- Small- and Medium-sized Enterprises (SMEs) — Abbreviation,
➥ A term widely used by the World Bank and the World Trade Organization (WTO).
- Limits banks place on businesses to determine there size.
- Unearned Income — Definition,
- Income such as interest, dividends, capital gains or rents, as opposed to earned income, such as wages, tips and salaries.