INCOME

Income

Income represents a flow of earnings from using factors of production to produce an output of goods and services which are then sold in markets. The main sources of income for individuals and households are:

1. Wages and salaries from work often supplemented by overtime and productivity bonuses.
2. Interest from savings held in banks, building societies and other accounts.
3. Dividends from share ownership.
4. Rent income from the ownership of property.

For the majority of people, most of their weekly or monthly income comes from their job. The government can also affect people’s disposable (or “post-tax”) income by taxing incomes and by giving welfare benefits to households on low incomes or to people who are out of work.