Active Income is the money a person earns by actively working or providing services, where income stops if the work stops.
Active Income is the most common type of income and is earned through regular effort, time, or skills. It includes salaries, wages, commissions, professional fees, and business income where daily involvement is required.
This type of income depends directly on how much work a person does. If the individual stops working—due to leave, illness, or job loss—the income also stops or reduces. Because of this, active income offers limited financial security unless supported by savings or investments.
Active income is usually taxable under income tax laws and is the primary source of earnings for salaried employees, freelancers, professionals, and small business owners. Many people aim to use active income to build savings and investments that later generate passive income.
"A software engineer earning a monthly salary or a doctor charging consultation fees earns active income because they must work regularly to receive payment."