Active income refers to the earnings generated from direct participation in work or services. This includes wages, salaries, commissions, and tips received for performing tasks or providing services. Individuals typically exchange their time and effort for this type of income, making it dependent on their active involvement in their job or business. Common sources of active income include traditional employment, freelance work, and side gigs. Unlike passive income, which can be earned without ongoing effort, active income requires continuous work to maintain earnings. Examples of active income sources are hourly wages, salaries, and contract payments.