Enter the annual income and the percentage of income into the calculator to determine the income-based rent.

## Income-Based Rent Formula

The following formula is used to calculate the income-based rent.

R = I * P

Variables:

- R is the rent amount ($) I is the annual income of the tenant ($) P is the percentage of income to be paid as rent (decimal)

To calculate the income-based rent, multiply the annual income of the tenant by the percentage of income to be paid as rent. The result is the annual rent amount. To get the monthly rent, divide the annual rent by 12.

## What is an Income-Based Rent?

Income-based rent, also known as income-adjusted or income-restricted rent, is a type of rental agreement where the amount a tenant pays is determined by their income. This is often used in affordable housing programs, where the goal is to provide housing to low-income individuals or families. The rent is typically set at a fixed percentage of the tenant’s income, often around 30%, to ensure that housing costs are affordable and do not place an undue financial burden on the tenant.

## How to Calculate Income-Based Rent?

The following steps outline how to calculate the Income-Based Rent using the formula R = I * P.

- First, determine the annual income of the tenant ($).
- Next, determine the percentage of income to be paid as rent (decimal).
- Next, gather the formula from above = R = I * P.
- Finally, calculate the Income-Based Rent.
- After inserting the variables and calculating the result, check your answer with the calculator above.

**Example Problem : **

Use the following variables as an example problem to test your knowledge.

annual income of the tenant ($) = 50000

percentage of income to be paid as rent (decimal) = 0.3