While there are two types of income, both active and passive income, most employees only receive an active income which is money or commission received from completing a job either full-time, part-time or could be seen as tips received. The definition of active income is straight-forward, but it has some nuances that we will talk about below.
An active income can be in the form of a set salary, which is received monthly, hourly wages, or bi-weekly wages. Some employees who obtain hourly wages as an active income can also generate a larger sum by working overtime or completing additional tasks.
In some cases, employees may receive a commission as an active income, this is usually pertained as a percentage of a total lump sum of money. The percentile thereof, either 1%, 3%, 5%, or anything in between is then paid to the employee as an active income. Working on a commission basis does not however secure a set salary or wage amount and can be different each time.
While it’s possible to receive both an active and passive income, some people tend to get confused about the difference. Let’s see what active income is not:
Check out here to get more insight about how active income is different from passive income.
Some basics to remember about active income:
The below ones will fall into the category of passive income:
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