Active income refers to what type of earning?

Active income specifically refers to the earnings generated through direct involvement in work. This includes wages, salaries, tips, commissions, and any form of payment that results from actively engaging in a job or self-employment. It contrasts with income types such as passive income, which comes from investments or holdings, and does not require ongoing effort or active participation in the earning process.

Income from investments, properties, or inheritance may provide financial benefits but does not involve active work or ongoing effort to generate that income. As such, understanding the concept of active income is crucial in the context of personal finances and tax implications, where it is distinguished from other forms of income that do not involve direct labor or services.