# Discretionary Income Calculator

URL: https://speedycalculator.com/calculators/finance/discretionary-income/
Last updated: 2026-10-25

> The discretionary income calculator works out the income left after taxes and essential expenses – what you can spend on wants or save – and the official U.S. federal student loan definition (income above 150% or 225% of the poverty guideline).

## Inputs

- Annual gross income (AGI)
- Taxes
- Essential expenses (housing, food, utilities, transport, insurance)
- Household size
- Poverty guideline multiple (student loans)

## Results

- Discretionary income
- Per month
- Poverty guideline for your household
- Discretionary income for student loans
- IBR payment at 10% (monthly)

## Formula

```
Discretionary income = gross income − taxes − essential expenses
Student loan definition = AGI − (150% or 225% × federal poverty guideline for your family size)
```

## Explanation

Discretionary income is a better measure of financial flexibility than gross income. For federal student loans it sets income-driven repayment amounts. The 2026 HHS poverty guideline is $15,960 for one person plus $5,680 per extra person in the 48 contiguous states.

### How to use the Discretionary Income Calculator

- **Annual gross income (AGI)**
- **Taxes**
- **Essential expenses (housing, food, utilities, transport, insurance)**
- **Household size**
- **Poverty guideline multiple (student loans)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter your annual gross income, taxes, essential expenses and household size.

### Tips

- Use real (inflation-adjusted) figures to compare across years.
- Check whether data are seasonally adjusted.
- Use the same currency and base year throughout.
- Economic models simplify reality – treat results as illustrations, not forecasts.

### Common mistakes to avoid

- Mixing nominal and real values.
- Comparing percentage changes with percentage-point changes.
- Treating correlations as causes.

### Inputs explained

FieldWhat to enterAnnual gross income (AGI)Amount in your currencyTaxesAmount in your currencyEssential expenses (housing, food, utilities, transport, insurance)Amount in your currencyHousehold sizeA numberPoverty guideline multiple (student loans)Choose one: 150% (IBR / PAYE), 225% (SAVE, discontinued), 100% (ICR)

### What each result means

- **Discretionary income** = [Annual gross income (AGI)] - [Taxes] - [Essential expenses (housing, food, utilities, transport, insurance)]
- **Per month** = [Discretionary income]÷12
- **Poverty guideline for your household** = 15960 + 5680×([Household size] - 1)
- **Discretionary income for student loans** = max([Annual gross income (AGI)] - [Poverty guideline multiple (student loans)]÷100×[Poverty guideline for your household], 0)
- **IBR payment at 10% (monthly)** = [Discretionary income for student loans]×0.1÷12

### Example values

How the main result changes when **Annual gross income** changes and everything else stays at the example values above:

Annual gross income (AGI)Discretionary income32,500-14,50048,7501,75065,00018,00081,25034,25097,50050,500130,00083,000

## Worked example

Inputs — Annual gross income (AGI): $65,000; Taxes: $11,000; Essential expenses (housing, food, utilities, transport, insurance): $36,000; Household size: 1; Poverty guideline multiple (student loans): 150% (IBR / PAYE).

Results — **Discretionary income = $18,000.00**; Per month = $1,500.00; Poverty guideline for your household = $15,960.00; Discretionary income for student loans = $41,060.00; IBR payment at 10% (monthly) = $342.17.

## FAQ

**What is discretionary income?**
Income left after taxes and necessities.

**How is it different from disposable income?**
Disposable income is after taxes only.

**How do student loans define discretionary income?**
AGI minus 150% of the poverty guideline (for most plans).

**What formula does the Discretionary Income Calculator use?**
Discretionary income = gross income − taxes − essential expenses.


## Sources

- [HHS – Poverty guidelines](https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines)