Listen to a Business English Dialogue About Earned income
Charles: Eden, do you know what “earned income” means in finance?
Eden: No, what is it?
Charles: It’s income that you earn from working, like your salary or wages.
Eden: Oh, so it’s the money you make from your job?
Charles: Exactly, it’s different from passive income, which comes from investments or business activities.
Eden: Are there any taxes on earned income?
Charles: Yes, earned income is typically subject to income tax, as well as payroll taxes like Social Security and Medicare.
Eden: I see. So, it’s important to consider taxes when planning your finances?
Charles: Absolutely, understanding the tax implications of your earned income can help you manage your finances more effectively.
Eden: Can earned income include bonuses or commissions?
Charles: Yes, any additional money you receive for work, whether it’s a bonus, commission, or overtime pay, is considered earned income.
Eden: Got it. It seems like earned income is a crucial part of financial stability.
Charles: Yes, it’s the foundation for most people’s financial well-being and allows them to meet their everyday expenses and save for the future.
Eden: Thanks for explaining, Charles. It’s helpful to understand the basics of earned income.
Charles: No problem, Eden. Finance can seem complex, but breaking it down into simple concepts like earned income can make it more manageable.