Earned income refers to the money that individuals receive from working, whether through a job or self-employment. This type of income includes wages, salaries, bonuses, and tips. It is typically subject to income tax and is reported on tax returns. Unlike passive income, which comes from investments or rental properties, earned income is directly tied to the effort and time put into work. Many people rely on earned income as their primary source of financial support, making it a crucial aspect of personal finance and economic stability.