Enter the household income and poverty threshold percentage into the calculator to determine the poverty level. This calculator can also evaluate any of the variables given the others are known.

Poverty Level Formula

The following formula is used to calculate the poverty level.

PL = (H * P) / 100


  • PL is the poverty level ($) H is the household income ($) P is the poverty threshold percentage (decimal)

To calculate the poverty level, multiply the household income by the poverty threshold percentage and then divide the result by 100. This will give you the poverty level in dollars.

What is a Poverty Level?

A poverty level, also known as the poverty line or poverty threshold, is the minimum income level necessary to meet basic needs such as food, clothing, and shelter. It is determined by the government and varies depending on factors such as location, family size, and age. Individuals or families with income below the poverty level are considered to be in poverty and may be eligible for certain types of government assistance.

How to Calculate Poverty Level?

The following steps outline how to calculate the Poverty Level using the given formula:

  1. First, determine the household income ($).
  2. Next, determine the poverty threshold percentage (decimal).
  3. Next, gather the formula from above = PL = (H * P) / 100.
  4. Finally, calculate the Poverty Level.
  5. 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.

household income ($) = 5000

poverty threshold percentage (decimal) = 0.2