Earned income is money that is earned through employment or self-employment. It is the most common form of income for most people and is usually taxed by the government. Earned income is important because it is the primary source of income for most people and is used to pay for basic necessities such as food, housing, and transportation.
Example of Earned Income
A common example of earned income is wages from a job. This could be a salary from a full-time job, wages from a part-time job, or income from freelance work. Other examples of earned income include tips, commissions, bonuses, and royalties.
Table of Earned Income
Type of Earned Income Description
Salary A fixed amount of money paid to an employee for their work
Wages Money paid to an employee for their work, usually based on the number of hours worked
Tips Money given to an employee for providing good service
Commissions Money paid to an employee for selling a product or service
Bonuses Money given to an employee for achieving a goal or meeting a target
Royalties Money paid to an author or artist for the use of their work
Key Takeaways
- Earned income is money that is earned through employment or self-employment.
- It is the most common form of income for most people and is usually taxed by the government.
- Examples of earned income include wages, tips, commissions, bonuses, and royalties.
Conclusion
Earned income is an important source of income for most people and is used to pay for basic necessities such as food, housing, and transportation. It is important to understand the different types of earned income and how they are taxed in order to maximize your income and minimize your tax burden.
