5 Entrepreneurial income: Mixed income

Printable version (PDF) of Chapter 5 (June 30, 2008)


5.1 Mixed income represents the entrepreneurial income, generated in the production of goods and services, of unincorporated business. This income accrues to the capital factors of production, in the same way that operating surplus does for corporations and government business enterprises (see Chapter 4). However, unincorporated business income is described as mixed income1 because it contains remuneration for work undertaken by the owner(s) that cannot be separated from the return to the owner(s) as entrepreneur(s).

5.2 Mixed income (proprietors' revenue) captures a class of income that is difficult to classify—essentially falling between labour income and business profits. It is the amount that independent owners who are in business for themselves, but who have not incorporated their businesses, earn. The amount that the owner of an unincorporated business earns in a year is typically considered by the owner to be profit, yet a significant amount ends up as remuneration to the owner for his labour services.

5.3 The SNA 1993 defines mixed income as follows:

"Mixed income is the surplus or deficit accruing from production by unincorporated business owned by households; it implicitly contains an element of remuneration for work done by the owner, or other members of the household, that cannot be separately identified from the return to the owner as entrepreneur but it excludes the surplus coming from owner-occupied dwellings".2 (SNA 1993 paragraphs 7.4, 4.134 and 7.81)

5.4 In the Canadian System of National Accounts (CSNA), the net imputed rent generated by owner-occupied dwellings is added to mixed income. The income generated by owner-occupiers in their capacity as producers of housing services is included in mixed income, as it represents all income generated by unincorporated business.

5.5 Mixed income specifically refers to the net income of both farm and non-farm unincorporated business and represents approximately 6% of income-based gross domestic product (GDP). Within the Income and Expenditure Accounts (IEA), mixed income is broken into two main components: accrued net income of farm operators from farm production; and, net income of non-farm unincorporated business. The latter is broken down into two sub-components: net income excluding rental income and net rental income, both paid and imputed.


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1. The income generated by owner-occupiers in their capacity as producers of housing services is included with the mixed income component in the Canadian SNA as it represents all income generated by unincorporated businesses. In the SNA 1993 it is included with operating surplus in the generation of income account.

2. The rationale for excluding imputed rent from mixed income in SNA 1993 is that there is no labour input into the production of these services.

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