Earned income is contrasted with investment income. It includes wages, salaries, honoraria, commission, professional fees, and other forms of compensation for services.
Earned income is pay you receive for work you perform, including salaries, wages, tips, and professional fees.
Your earned income is included in your gross income, along with unearned income from interest, dividends, and capital gains. If you have earned income, you're eligible to contribute to an individual retirement account (IRA).
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Includes wages, salaries, tips, includible in gross income, and net earnings from self-employment earnings.
- Browse Related Terms: bonus, compulsory payroll tax, earned income, employee, flat tax, Form W-4, Employee's Withholding Allowance Certificate, formal tax legislation process, income taxes, independent contractor, salary, self-employment loss, self-employment profit, tip income, wages