What is the term for income earned from employment such as wages or commissions?

The term that refers to income earned from employment, including wages or commissions, is compensation. This category encompasses payments received for services rendered, which can include hourly wages, salaries, bonuses, commissions, and other benefits related to employment.

In the context of income types, compensation is specifically linked to efforts and services an employee provides to their employer. It is distinct from other income types; for instance, passive income typically refers to earnings from investments in which an individual is not actively involved, such as rental income or dividends. Similarly, investment income involves earnings from various financial instruments, while business income pertains to profits generated from business operations rather than direct employee earnings.

Understanding the definition and context of compensation helps clarify the distinction between various income categories, emphasizing the role of services provided in earning this type of income.