Quick answer
What the righteous earn feeds life; what the wicked earn feeds more sin. The verse follows the money one step past the paycheck, to what the earnings become.
Read both lines
Both lines are about income, and the question the proverb asks is not how much but toward what. The labor of the righteous "leads to life": earnings become bread, shelter, generosity, a household where people flourish. The wages of the wicked lead "to sin": earnings become the funding for the next scheme, the next indulgence, the next round of the very appetite that earned them. Income is never an endpoint; it is always converted into something, and the conversion runs through the person who holds it. The same silver becomes soup in one hand and leverage in another. Where does it go when it passes through you? That, more than the amount, is what the sages are watching.
Why translations differ
The word the NKJV renders "sin" can mean the act itself or, by extension, the penalty it earns, which is why some Bibles read "punishment" or "sin and death" in the second line. The entry above follows the NKJV; the harder reading may also be in view. Either way the contrast holds: righteous earnings feed life, and wicked earnings feed the thing that unmakes it. Nothing in the teaching depends on forcing the choice.
Related: Proverbs 11:18 · Proverbs 16:8
New King James Version®, Copyright © 1982, Thomas Nelson. All rights reserved. Full copyright information. Scripture provided by API.Bible.
Go Deeper
If this verse has been used to put weight on you that it was never carrying, ask about it directly.