First and foremost, it’s crucial to understand what we mean by non-employment income. Essentially, this refers to the earnings that don’t arise from a traditional employer-employee relationship. If you’re not an employee of the company or individual that pays you for your services, those earnings fall under the non-employment income category.

Here are some common examples of non-employment income:

Self-Employment Income: This involves earning money through a trade or business that you operate. It can be anything from running a small online store to offering consulting services in your area of expertise.

Freelance Work: This encompasses any income earned from freelance services. Are you a writer, designer, coder, or consultant? If you’re hired for project-based work on a nonemployee basis, the compensation you receive is categorized as non-employment income.

Contract Work: Similar to freelance work, contract work refers to income earned from completing specific tasks or projects under a contract. However, unlike employees, contract workers aren’t typically offered benefits like health insurance or retirement plans by their clients.

Investment Income: This includes money earned from investments, such as stocks, bonds, or real estate. While this doesn’t involve a service or trade, it’s still considered non-employment income.

Rental Income: If you’re renting out a property you own and generating income from it, this also comes under the non-employment income umbrella.

Royalties: If you’re an artist, author, or inventor and receive royalties from your work, this type of income is also classified as non-employment income.