Enter the rank of individual’s income and the total number of individuals into the calculator to determine the income percentile. This calculator can also evaluate any of the variables given the others are known.
Income Percentile Formula
The following formula is used to calculate the income percentile.
IP = (R / T) * 100
Variables:
- IP is the income percentile (%)
- R is the rank of individual’s income in the income distribution
- T is the total number of individuals in the income distribution
To calculate the income percentile, divide the rank of an individual’s income by the total number of individuals in the income distribution. Multiply the result by 100 to get the income percentile.
What is an Income Percentile?
An income percentile is a statistical tool that ranks an individual’s income level compared to all other individuals in the same group or population. It shows what percentage of the population that individual’s income surpasses. For example, if someone is in the 70th income percentile, it means their income is higher than 70% of the population. This measure is often used in economic studies and reports to analyze income distribution and inequality.
How to Calculate Income Percentile?
The following steps outline how to calculate the Income Percentile.
- First, determine the rank of the individual’s income in the income distribution (R).
- Next, determine the total number of individuals in the income distribution (T).
- Next, use the formula IP = (R / T) * 100 to calculate the Income Percentile.
- Finally, calculate the Income Percentile.
- 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.
Rank of individual’s income in the income distribution (R) = 75
Total number of individuals in the income distribution (T) = 1000
