Earned vs. Unearned Income

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What is Earned Income?

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Income received for work performed or services rendered, such as wages, salaries, and tips.

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What is Unearned Income?

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Income received from sources other than employment, such as investments, rental income, or government benefits.

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Example of Earned Income?

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A paycheck received from working at a pizza shop.

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Example of Unearned Income?

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Rental income from a property owned by a family.

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What is a paycheck?

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A document issued by an employer to pay an employee for work done.

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What are Social Security benefits?

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Government payments made to individuals who are retired, disabled, or survivors of deceased workers.

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Is rental income considered earned or unearned?

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Unearned income.

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What is the difference between earned and unearned income?

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Earned income is from work, while unearned income is from investments or benefits.

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Can babysitting be classified as earned income?

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Yes, because it is payment for services rendered.

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What is an example of unearned income from investments?

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Dividends received from stocks.