DEFINITION of 'Subvention Income'
The amount of revenue or source of funding that a not-for-profit organization retains in order to cover the organization's annual operating expenses. The amount of subvention income that is received is often calculated using a predefined formula based on the amount of services that the organization provides.
BREAKING DOWN 'Subvention Income'
For example, the amount of subvention income that a student union receives may based on the number of students that have fully attended the educational institution that year.
Depending on the country, this type of income may or may not be taxed. In the United Kingdom, subvention income is not taxed, but any differences between the amount of subvention income set aside and operating costs do need to be documented in the company's balance sheet.