Enter your personal income, government taxes, and government transfers into the disposable income calculator. The calculator will display your total personal income at your disposal.
Disposable Income Formula
The following formula can be used to calculate an individual’s disposable income.
DI = PI - T + GT
- Where DI is disposable income
- PI is personal income
- T is taxes paid to the government
- GT is government transfers sent to you from the government
To calculate a disposable income, subtract the taxes paid to the government from the person income, then add in government transfer sent from the government to the individual.
Disposable Income Definition
Disposable income is defined as all of the monetary value available to spend after taxes have been paid.
How to calculate disposable income?
How to calculate a disposable income?
- First, determine your personal income
In this case, personal income is your pre-tax pay from your job.
- Next, determine your taxes
This will be the total taxes paid to both the state, federal, and local governments.
- Next, determine your government transfers
This could be things such as social security or tax breaks that you receive at the end of the year.
- Calculate your disposable income.
Enter your information into the formula DI = PI – T + GT to calculate your total disposable income.
FAQ
Disposable income is a term used to describe the total income (money) you are receiving and can choose to do what you want. Since you do not have an option to pay taxes, that money is subtracted from your total.
These are any additional revenue streams received directly from the government. One example of this is unemployment checks.
