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earned income

B2
UK/ɜːnd ˈɪnkʌm/US/ɜːrnd ˈɪnˌkʌm/

Formal, Financial, Legal, Administrative

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Definition

Meaning

Money received for work performed, such as wages, salaries, commissions, and tips.

Income derived from active participation in a trade, business, or profession, as opposed to unearned income from investments or assets. In taxation contexts, it is distinguished from passive or portfolio income.

Linguistics

Semantic Notes

Primarily a compound noun with strong collocation in financial, tax, and legal domains. Represents a key conceptual category in personal finance and economics, often contrasted with 'unearned income' or 'passive income'.

Dialectal Variation

British vs American Usage

Differences

No significant lexical or semantic differences. The term is used identically in both British and American English in professional contexts.

Connotations

Neutral and technical in both varieties. Slightly more common in American English due to its specific definition in the US tax code.

Frequency

Higher frequency in American English, particularly in contexts related to the Internal Revenue Service (IRS) and tax forms (e.g., 'earned income credit'). Common in British English in accountancy, personal finance, and welfare benefit contexts.

Vocabulary

Collocations

strong
taxablegrossnetdeclarereportsource of
medium
steadyregularannualsupplementderive
weak
modestsubstantialprimarylegitimate

Grammar

Valency Patterns

declared ~reported ~~ from (a job/business)~ of £X~ is subject to tax

Vocabulary

Synonyms

Strong

labor income (US) / labour income (UK)active income

Neutral

wages and salariesemployment incomework income

Weak

payearnings (broader term)

Vocabulary

Antonyms

unearned incomepassive incomeinvestment incomecapital gains

Phrases

Idioms & Phrases

  • “[Not typically idiomatic; the term itself is technical]”

Usage

Context Usage

Business

Used in payroll, accounting, and financial reporting to distinguish compensation from other revenue streams.

Academic

Used in economics and sociology papers discussing labour markets, income distribution, and social welfare.

Everyday

Used when discussing tax returns, applying for mortgages, or explaining one's financial situation (e.g., 'My earned income comes from my teaching job').

Technical

A precise term in tax law (e.g., for calculating eligibility for tax credits or certain retirement account contributions).

Examples

By Part of Speech

verb

British English

  • He earns his income through consultancy.
  • All income earned abroad must be declared.

American English

  • She earns income from her freelance work.
  • The income earned from tips is still taxable.

adverb

British English

  • [The term is not typically used as an adverb. Use 'from work' or 'through employment' instead.]

American English

  • [The term is not typically used as an adverb. Use 'from work' or 'through employment' instead.]

adjective

British English

  • The earned income allowance is quite complex.
  • They reviewed their earned income streams.

American English

  • He qualifies for the Earned Income Tax Credit (EITC).
  • Their earned income potential is high.

Examples

By CEFR Level

A2
  • My earned income comes from my job at the shop.
  • He uses his earned income to pay rent.
B1
  • For your tax form, you need to write down your earned income.
  • Her earned income is higher this year because she works more hours.
B2
  • The government programme provides support for families with low earned income.
  • When applying for the loan, the bank will scrutinise your earned income history.
C1
  • The policy debate centres on how to tax earned income versus capital gains more fairly.
  • His portfolio generates substantial unearned income, which supplements his modest earned income from teaching.

Learning

Memory Aids

Mnemonic

Think of EAR-NED income: you put your EAR to the grindstone and EARN-ED it through work.

Conceptual Metaphor

INCOME IS A REWARD FOR LABOUR (contrasted with INCOME IS A FRUIT OF ASSETS).

Watch out

Common Pitfalls

Translation Traps (for Russian speakers)

  • Avoid translating as "заработанный доход" as it is a tautology. The standard equivalent is "трудовые доходы" or "доходы от трудовой деятельности". The direct calque "заработанный" is not typically used in this financial collocation.
  • Do not confuse with "заработок" (earnings/wages), which is more informal.

Common Mistakes

  • Using it to refer to any money received (e.g., a gift or lottery win is not earned income).
  • Confusing it with 'gross income', which can include unearned sources.
  • Misspelling as 'earnt income' (non-standard).

Practice

Quiz

Fill in the gap
When filling out your self-assessment form, you must declare all from employment or self-employment.
Multiple Choice

Which of the following is an example of 'earned income'?

FAQ

Frequently Asked Questions

Typically, no. In most tax systems, state pensions are classified as unearned income or transfer payments, as they are not received in exchange for current work.

'Gross income' is the total income from all sources before deductions, which includes both earned and unearned income (like interest or dividends). 'Earned income' is a subset of gross income, specifically from active work.

Yes, bonuses received as part of your employment (performance bonuses, year-end bonuses) are considered earned income, as they are compensation for work.

The distinction is crucial for taxation, social security contributions, and eligibility for certain government benefits or tax credits, which often apply different rules and rates to each type of income.