Primary income is a component of the current account that records income earned by residents of one country from their factor inputs in another country.

Types of primary income:

• Employee compensation: wages, salaries, and benefits paid to workers who work abroad (e.g., border workers, seasonal workers)
• Investment income: returns from owning foreign assets, including:
  • Direct investment income: profits earned by companies from their overseas subsidiaries
  • Portfolio investment income: dividends from shares and interest from bonds
  • Other investment income: interest earned on loans and savings
• Rent: income from renting property abroad

Direction of flows:

• Primary income received: income earned by domestic residents from foreign sources (credit)
• Primary income paid: income paid to foreign residents from domestic sources (debit)

Primary income balance:

• Calculated as: Primary income received − Primary income paid
• A positive balance means a country is a net creditor internationally
• A negative balance means a country is a net debtor internationally