diff --git a/client/src/types/Income.ts b/client/src/types/Income.ts
new file mode 100644
index 0000000..14aeec4
--- /dev/null
+++ b/client/src/types/Income.ts
@@ -0,0 +1,37 @@
+export interface Income {
+  income_id: number;
+  amount: number;
+  date: string;
+  source: string;
+  description?: string;
+  creation_date: string;
+  user_id: number;
+  category_id: number;
+  category?: IncomeCategory;
+}
+
+export interface IncomeCategory {
+  category_id: number;
+  category_name: string;
+  icon_url?: string;
+  is_custom: boolean;
+  user_id?: number;
+  created_at: string;
+  updated_at: string;
+}
+
+export interface CreateIncomeRequest {
+  amount: number;
+  date: string;
+  source: string;
+  description?: string;
+  category_id: number;
+}
+
+export interface UpdateIncomeRequest {
+  amount?: number;
+  date?: string;
+  source?: string;
+  description?: string;
+  category_id?: number;
+}
\ No newline at end of file
diff --git a/server/controllers/income.controller.js b/server/controllers/income.controller.js
new file mode 100644
index 0000000..2b8dac4
--- /dev/null
+++ b/server/controllers/income.controller.js
@@ -0,0 +1,154 @@
+import incomeService from "../services/income.service.js";
+import { asyncHandler } from "../utils/asyncHandler.js";
+
+//---------------INCOME---------------//
+
+export const createIncome = asyncHandler(async (req, res) => {
+  const { amount, date, source, description, category_id } = req.body;
+
+  if (!amount || !source || !category_id) {
+    return res.status(400).json({ error: "Missing required fields" });
+  }
+
+  const incomeData = {
+    amount: parseFloat(amount),
+    source,
+    description,
+    category: { connect: { category_id: parseInt(category_id) } },
+  };
+
+  if (date) {
+    const parsedDate = new Date(date);
+    if (!isNaN(parsedDate.getTime())) {
+      incomeData.date = parsedDate;
+    }
+  }
+
+  const income = await incomeService.createIncome(req.user.user_id, incomeData);
+  res.status(201).json(income);
+});
+
+export const getIncomes = asyncHandler(async (req, res) => {
+  const { start, end } = req.query;
+  const filters = {};
+
+  if (start) filters.start = new Date(start);
+  if (end) filters.end = new Date(end);
+
+  const incomes = await incomeService.getIncomes(req.user.user_id, filters);
+  res.json(incomes);
+});
+
+export const getIncome = asyncHandler(async (req, res) => {
+  const { id } = req.params;
+  const income = await incomeService.getIncomeById(id, req.user.user_id);
+
+  if (!income) {
+    return res.status(404).json({ error: "Income not found" });
+  }
+
+  res.json(income);
+});
+
+export const updateIncome = asyncHandler(async (req, res) => {
+  const { id } = req.params;
+  const updates = req.body;
+
+  if (updates.date) updates.date = new Date(updates.date);
+  if (updates.amount) updates.amount = parseFloat(updates.amount);
+  if (updates.category_id) {
+    updates.category = {
+      connect: { category_id: parseInt(updates.category_id) },
+    };
+    delete updates.category_id;
+  }
+
+  try {
+    const income = await incomeService.updateIncome(
+      id,
+      req.user.user_id,
+      updates
+    );
+    res.json(income);
+  } catch (error) {
+    res.status(404).json({ error: error.message });
+  }
+});
+
+export const deleteIncome = asyncHandler(async (req, res) => {
+  const { id } = req.params;
+
+  try {
+    await incomeService.deleteIncome(id, req.user.user_id);
+    res.status(204).send();
+  } catch (error) {
+    res.status(404).json({ error: error.message });
+  }
+});
+
+//---------------INCOME CATEGORIES---------------//
+
+export const getIncomeCategories = asyncHandler(async (req, res) => {
+  const categories = await incomeService.getIncomeCategories(req.user.user_id);
+  res.json(categories);
+});
+
+export const getIncomeCategoriesByUser = asyncHandler(async (req, res) => {
+  const categories = await incomeService.getIncomeCategoriesByUser(
+    req.user.user_id
+  );
+  res.json(categories);
+});
+
+export const createIncomeCategory = asyncHandler(async (req, res) => {
+  const { category_name, icon_url, icon_emoji } = req.body;
+
+  if (!category_name) {
+    return res.status(400).json({ error: "Category name is required" });
+  }
+
+  try {
+    const category = await incomeService.createIncomeCategory(
+      req.user.user_id,
+      {
+        category_name,
+        icon_url,
+        icon_emoji,
+      }
+    );
+    res.status(201).json(category);
+  } catch (error) {
+    res.status(400).json({ error: error.message });
+  }
+});
+
+export const updateIncomeCategory = asyncHandler(async (req, res) => {
+  const { id } = req.params;
+  const { category_name, icon_url, icon_emoji } = req.body;
+
+  if (!category_name) {
+    return res.status(400).json({ error: "Category name is required" });
+  }
+
+  try {
+    const category = await incomeService.updateIncomeCategory(
+      id,
+      req.user.user_id,
+      { category_name, icon_url, icon_emoji }
+    );
+    res.json(category);
+  } catch (error) {
+    res.status(400).json({ error: error.message });
+  }
+});
+
+export const deleteIncomeCategory = asyncHandler(async (req, res) => {
+  const { id } = req.params;
+
+  try {
+    await incomeService.deleteIncomeCategory(id, req.user.user_id);
+    res.status(204).send();
+  } catch (error) {
+    res.status(400).json({ error: error.message });
+  }
+});
diff --git a/server/src/lib/prisma.js b/server/db/prisma.js
similarity index 100%
rename from server/src/lib/prisma.js
rename to server/db/prisma.js
diff --git a/server/package.json b/server/package.json
index 8fe6e2f..d79bff0 100644
--- a/server/package.json
+++ b/server/package.json
@@ -27,8 +27,7 @@
     "express": "^4.18.2",
     "helmet": "^7.1.0",
     "morgan": "^1.10.0",
-    "pg": "^8.11.3",
-    "@prisma/client": "^5.18.0"
+    "pg": "^8.11.3"
   },
   "devDependencies": {
     "nodemon": "^3.0.2",
diff --git a/server/prisma/schema.prisma b/server/prisma/schema.prisma
index 1c871fb..7f9dd94 100644
--- a/server/prisma/schema.prisma
+++ b/server/prisma/schema.prisma
@@ -6,7 +6,6 @@
 
 generator client {
   provider = "prisma-client-js"
-  output   = "../generated/prisma"
 }
 
 datasource db {
@@ -49,7 +48,6 @@ model IncomeCategory {
   category_id   Int       @id @default(autoincrement())
   category_name String    @db.VarChar(50)
   icon_url      String?   @db.VarChar(500)
-  icon_emoji    String?   @db.VarChar(10)
   is_custom     Boolean   @default(false)
   user_id       Int?
   user          User?     @relation(fields: [user_id], references: [user_id], onDelete: Cascade)
diff --git a/server/routes/income.route.js b/server/routes/income.route.js
new file mode 100644
index 0000000..bf73523
--- /dev/null
+++ b/server/routes/income.route.js
@@ -0,0 +1,22 @@
+import { Router } from 'express';
+import { createIncome, getIncomes, getIncome, updateIncome, deleteIncome, getIncomeCategories, getIncomeCategoriesByUser,createIncomeCategory, updateIncomeCategory, deleteIncomeCategory } from '../controllers/income.controller.js';
+
+const router = Router();
+
+//INCOME CATEGORY
+router.get('/categories', getIncomeCategories);
+router.get('/custom-categories', getIncomeCategoriesByUser)
+router.post('/categories', createIncomeCategory);
+router.put('/categories/:id', updateIncomeCategory);
+router.delete('/categories/:id', deleteIncomeCategory);
+
+//INCOME
+router.get('/', getIncomes);
+router.get('/:id', getIncome);
+router.post('/', createIncome);
+router.put('/:id', updateIncome);
+router.delete('/:id', deleteIncome);
+
+
+
+export default router;
\ No newline at end of file
diff --git a/server/server.js b/server/server.js
index dd6bced..476fb04 100644
--- a/server/server.js
+++ b/server/server.js
@@ -2,6 +2,7 @@ import express from 'express';
 import cors from 'cors';
 import dotenv from 'dotenv';
 import { PrismaClient } from '@prisma/client';
+import incomeRoutes from './routes/income.route.js';
 
 dotenv.config();
 
@@ -11,6 +12,15 @@ const PORT = process.env.PORT || 8080;
 app.use(cors());
 app.use(express.json());
 
+//temporary middleware for testing
+app.use((req, res, next) => {
+  req.user = { user_id: 4 }; // fake user, but you have to create a fake user with id 4 as well in your local database
+  next();
+});
+
+//Routes
+app.use('/api/incomes', incomeRoutes);
+
 // Initialize a single Prisma client instance
 const prisma = new PrismaClient();
 
diff --git a/server/services/income.service.js b/server/services/income.service.js
new file mode 100644
index 0000000..10c959e
--- /dev/null
+++ b/server/services/income.service.js
@@ -0,0 +1,181 @@
+import { prisma } from "../db/prisma.js";
+
+//---------------INCOME---------------//
+
+//POST
+const createIncome = async (userId, data) => {
+  return await prisma.income.create({
+    data: {
+      ...data,
+      user: { connect: { user_id: userId } },
+    },
+    include: { category: true },
+  });
+};
+
+//GET ALL (with start and end date query params)
+const getIncomes = async (userId, filters = {}) => {
+  const where = { user_id: userId };
+
+  if (filters.start || filters.end) {
+    where.date = {};
+    if (filters.start) where.date.gte = new Date(filters.start);
+    if (filters.end) where.date.lte = new Date(filters.end);
+  }
+
+  return await prisma.income.findMany({
+    where,
+    include: { category: true },
+    orderBy: { date: "desc" },
+  });
+};
+
+//GET BY ID
+const getIncomeById = async (id, userId) => {
+  return await prisma.income.findFirst({
+    where: { income_id: parseInt(id), user_id: userId },
+    include: { category: true },
+  });
+};
+
+//UPDATE
+const updateIncome = async (id, userId, data) => {
+  const income = await prisma.income.findFirst({
+    where: { income_id: parseInt(id), user_id: userId },
+  });
+
+  if (!income) {
+    throw new Error("Income not found or not authorized");
+  }
+
+  return await prisma.income.update({
+    where: { income_id: parseInt(id) },
+    data,
+    include: { category: true },
+  });
+};
+
+//DELETE
+const deleteIncome = async (id, userId) => {
+  const income = await prisma.income.findFirst({
+    where: { income_id: parseInt(id), user_id: userId },
+  });
+
+  if (!income) {
+    throw new Error("Income not found or not authorized");
+  }
+
+  await prisma.income.delete({
+    where: { income_id: parseInt(id) },
+  });
+};
+
+//---------------INCOME CATEGORY---------------//
+
+//GET ALL
+const getIncomeCategories = async (userId) => {
+  return await prisma.incomeCategory.findMany({
+    where: {
+      OR: [{ user_id: null }, { user_id: userId }],
+    },
+    orderBy: [{ is_custom: "asc" }, { category_name: "asc" }],
+  });
+};
+
+//GET ALL BY USER
+const getIncomeCategoriesByUser = async (userId) => {
+  return await prisma.incomeCategory.findMany({
+    where: {
+      user_id: userId,
+    },
+    orderBy: [{ is_custom: "asc" }, { category_name: "asc" }],
+  });
+};
+
+//POST
+const createIncomeCategory = async (userId, data) => {
+  const existingCategory = await prisma.incomeCategory.findFirst({
+    where: {
+      category_name: data.category_name,
+      user_id: userId,
+    },
+  });
+
+  if (existingCategory) {
+    throw new Error("Category already exists");
+  }
+
+  return await prisma.incomeCategory.create({
+    data: {
+      ...data,
+      is_custom: true,
+      user: { connect: { user_id: userId } },
+    },
+  });
+};
+
+//UPDATE
+const updateIncomeCategory = async (id, userId, data) => {
+  const category = await prisma.incomeCategory.findFirst({
+    where: { category_id: parseInt(id), user_id: userId },
+  });
+
+  if (!category) {
+    throw new Error("Category not found or not authorized");
+  }
+
+  if (data.category_name) {
+    const duplicateCategory = await prisma.incomeCategory.findFirst({
+      where: {
+        category_name: data.category_name,
+        user_id: userId,
+        NOT: { category_id: parseInt(id) },
+      },
+    });
+
+    if (duplicateCategory) {
+      throw new Error("Category name already exists");
+    }
+  }
+
+  return await prisma.incomeCategory.update({
+    where: { category_id: parseInt(id) },
+    data,
+  });
+};
+
+//DELETE
+const deleteIncomeCategory = async (id, userId) => {
+  const category = await prisma.incomeCategory.findFirst({
+    where: { category_id: parseInt(id), user_id: userId },
+  });
+
+  if (!category) {
+    throw new Error("Category not found or not authorized");
+  }
+
+  const incomesUsingCategory = await prisma.income.count({
+    where: { category_id: parseInt(id) },
+  });
+
+  if (incomesUsingCategory > 0) {
+    throw new Error("Cannot delete category that is being used by incomes");
+  }
+
+  await prisma.incomeCategory.delete({
+    where: { category_id: parseInt(id) },
+  });
+};
+
+export default {
+  createIncome,
+  getIncomes,
+  getIncomeById,
+  updateIncome,
+  deleteIncome,
+  getIncomeCategories,
+  createIncomeCategory,
+  getIncomeCategoriesByUser,
+  updateIncomeCategory,
+  deleteIncomeCategory,
+};
diff --git a/server/utils/asyncHandler.js b/server/utils/asyncHandler.js
new file mode 100644
index 0000000..bb1b35f
--- /dev/null
+++ b/server/utils/asyncHandler.js
@@ -0,0 +1,3 @@
+export const asyncHandler = (fn) => (req, res, next) => {
+  Promise.resolve(fn(req, res, next)).catch(next);
+};