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.
Inputs explained
| Field | What to enter |
|---|---|
| Annual gross income (AGI) | Amount in your currency |
| Taxes | Amount in your currency |
| Essential expenses (housing, food, utilities, transport, insurance) | Amount in your currency |
| Household size | A number |
| Poverty 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 income |
|---|---|
| 32,500 | -14,500 |
| 48,750 | 1,750 |
| 65,000 | 18,000 |
| 81,250 | 34,250 |
| 97,500 | 50,500 |
| 130,000 | 83,000 |
Formula
Discretionary income = gross income − taxes − essential expenses
Student loan definition = AGI − (150% or 225% × federal poverty guideline for your family size)
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.
Frequently asked questions
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).