{"ok":true,"canonical_url":"https://dealroom.so/glossary/employment-income","api_url":"https://dealroom.so/api/public/glossary/employment-income","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"employment-income","term":"Employment income","group":"Reading the business","definition":"This refers to the wages, salaries, and other compensation paid to employees for their work. It's a major operating expense for most businesses.","what_it_means":"When analyzing a business, you'll scrutinize employment income on the Profit and Loss Statement to understand staffing costs and efficiency. Be sure to differentiate between owner compensation (which is often an add-back) and regular employee payroll when evaluating true cash flow.","url":"https://dealroom.so/glossary/employment-income","official_sources":[],"related":[{"slug":"payroll","term":"Payroll","url":"https://dealroom.so/glossary/payroll"},{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"}],"related_questions":[{"question":"If a seller note is on standby, is the seller prohibited from any post-sale employment with the business?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-note-is-on-standby-is-the-seller-prohibited-from-any-post-sale-employment-with"},{"question":"What if the acquired business primarily generates revenue from passive rental income?","url":"https://dealroom.so/sba-7a/questions/what-if-the-acquired-business-primarily-generates-revenue-from-passive-rental-income"},{"question":"What constitutes \"passive income\" disqualifying a business from 7(a) loan eligibility?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-passive-income-disqualifying-a-business-from-7-a-loan-eligibility"},{"question":"What if my personal tax returns show inconsistent income or losses from other ventures?","url":"https://dealroom.so/sba-7a/questions/what-if-my-personal-tax-returns-show-inconsistent-income-or-losses-from-other-ventures"},{"question":"Do businesses that primarily generate passive income qualify for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/do-businesses-that-primarily-generate-passive-income-qualify-for-an-sba-7-a-loan"},{"question":"Is there an income limit for my business to be \"small\" by SBA rules?","url":"https://dealroom.so/sba-loans/basics/is-there-an-income-limit-for-my-business-to-be-small-by-sba-rules"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Employment income","url":"https://dealroom.so/glossary/employment-income","source_type":"DealRoom Data"}}