Types of Income
Types of Income
Employment Income
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Salaries and Wages: This is the income that employees earn for the work they do. These can be hourly, daily, weekly, or monthly and includes overtime pay.
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Bonuses and Commission: These are additional types of income given to employees based on their performance.
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Benefits in Kind: These are non-cash benefits provided to employees, such as a company car or private health insurance.
Investment Income
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Interest: This is income earned from depositing money in a savings account or bonds.
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Dividends: These are payments made to shareholders (if you own shares), when a company makes a profit.
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Capital Gains: This is the income gained when a capital asset, like shares or property, increase in value.
Pension Income
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State pension: This is the regular income that individuals are entitled to receive from the state when they reach the state pension age.
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Company/Private pensions: These are pensions that you or your employer contribute to during your working life.
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Annuities: A type of retirement income which pays a regular income in return for a lump sum investment.
Property Income
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Rental Income: Income gained from letting property to tenants.
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Sale of Property: This is income that results when you sell property for more than the purchase price.
Welfare Benefits
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Universal Credit: A payment to help with living costs for those below a certain income level or out of work.
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Child Benefit: A government payment to those responsible for children.
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Jobseeker’s Allowance: A benefit for those who are out of work and actively looking for employment.
Other Types of Income
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Inheritance: Money or property received from the estate of a person who has died.
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Lottery/Prize Winnings: These are considered income and can be taxable depending on local laws.
Key Terms to Remember
- Salaries and Wages, Bonuses, Benefits in Kind, Interest, Dividends, Capital Gains, State pension, Company/Private pensions, Annuities, Rental Income, Universal Credit, Child Benefit, Jobseeker’s Allowance, Inheritance, Lottery/Prize Winnings.