24 Hour Loans glossary of financial terms

Before-tax Earned Income

Before-tax earned income is the income that you earn from your job before you have tax and any other required payments deducted from it. Earned income is basically any money that you earn by working for it so this income can include your regular salary, bonuses, commission payments and overtime payments, for example. Income that you earn from things like savings accounts is not counted as earned income but is referred to as unearned income.

So, if your current salary is set at ?24,000 a year then this will be your before-tax earned income. If you are paid monthly, for example, then your before-tax earned income will work out at a rate of ?2,000 a month. Your tax and associated responsibilities will mean that you do not actually receive this ?2,000 every month ? you will have to pay tax and National Insurance on your earnings first before you are paid your after tax income.