Disposable income

<h2 id="meanings-of-disposable-income">Meanings of disposable income</h2>
<p>Disposable income can be understood as: 
</p>
<ul><li>National disposable income of a country: The national income minus current transfers (current taxes on income, wealth etc., social contributions, social benefits and other current transfers), plus current transfers receivable by resident units from the rest of the world.<a class="footnote-ref" id="fnref:7" href="#fn:7"><sup>7</sup></a></li>
<li>Disposable personal (or family/household) income: The income that individuals or households have for their spending.</li></ul>
<h2 id="discretionary-income">Discretionary income</h2>
<p>Discretionary income is disposable income (after-tax income), minus all payments that are necessary to meet current bills. It is total personal income after subtracting taxes and minimal survival expenses (such as food, medicine, rent or <a href="/facts/Mortgage_loan/EtGHG9q3">mortgage</a>, utilities, insurance, transportation, property maintenance, child support, etc.) to maintain a certain <a href="/facts/Standard_of_living/oKRuG57a">standard of living</a>.<a class="footnote-ref" id="fnref:8" href="#fn:8"><sup>8</sup></a> Expenses that persist with zero income are termed <a href="/facts/Autonomous_consumption/zErCwQ5g">autonomous consumption</a>. Discretionary income is the amount of an individual's income available for spending after the essentials have been taken care of:
</p><p>
  
    
      
        
          Discretionary income
        
      
    
    {\displaystyle {\text{Discretionary income}}}

</p>

=
        (
        
          Gross income
        
        −
        
          taxes
        
        )
        −
        
          all compelled payments
        
      
    
    {\displaystyle =({\text{Gross income}}-{\text{taxes}})-{\text{all compelled payments}}}

=
        (
        
          Disposable income
        
        )
        −
        
          autonomous spending
        
      
    
    {\displaystyle =({\text{Disposable income}})-{\text{autonomous spending}}}

<p>The term "disposable income" is often incorrectly used to denote discretionary income. For example, people commonly refer to disposable income as the amount of "play money" left to spend or save.
</p>
<h2 id="in-the-national-accounts">In the national accounts</h2>
<p>The <a href="/facts/System_of_National_Accounts/EvbjBEh4">system of national accounts</a> defined the concept of disposable income for all institutional sectors of the economy. For corporations it is equal to <a href="/facts/Retained_earnings/o328GWPG">profit retained</a>, and for the government it is equal to <a href="/facts/Tax/8cXNkA00">taxes</a> + income received from <a href="/facts/Public_company/tnJQvSdR">public corporation</a>. The sum of disposable income across all institutional sectors is called the national disposable income.<a class="footnote-ref" id="fnref:9" href="#fn:9"><sup>9</sup></a>
</p>
<h2 id="see-also">See also</h2>
<ul><li><a href="/facts/List_of_countries_by_disposable_income/1AKezCVS">List of countries by disposable income</a></li>
<li><a href="/facts/List_of_countries_by_GNI_per_capita_growth/s706rq8e">List of countries by GNI per capita growth</a></li></ul>

<h2 id="external-links">External links</h2>
<ul><li><a href="https://web.archive.org/web/20050123214555/http://disposableincome.net/">A simple discretionary income calculator</a>—even though this says it's measuring "disposable income," using the economist's language, it's discretionary income.</li>
<li>Eurostat, News Release No. 60/2010, <a href="https://web.archive.org/web/20100602043608/http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-30042010-CP/EN/2-30042010-CP-EN.PDF">Household Savings and Disposable Income</a>, 30 April 2010</li>
<li>Eurostat, Statistics Explained, Glossary article: <a href="http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/National_disposable_income">National Disposable Income</a></li>
<li><a href="http://stats.oecd.org/wbos/index.aspx?datasetcode=sna_table2">OECD Disposable income statistics</a></li>
<li><a href="http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_&ctype=l&strail=false&nselm=h&met_y=disposable_personal_income&hl=en&dl=en">Google – public data</a>: GDP and Personal Income of the U.S. (annual): Disposal Personal Income</li>
<li><a href="http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_&ctype=l&strail=false&nselm=h&met_y=per_capita_disposable_personal_income&hl=en&dl=en">Google – public data</a>: GDP and Personal Income of the U.S. (annual): Disposal Personal Income per capita</li></ul>

<h2 id="references">References</h2>

<ol>
<li id="fn:1"><p>"Income Data Quality Issues in the Annual Social and Economic Supplement to the Current Population Survey" (PDF). Archived from the original (PDF) on 2015-10-14. Retrieved 2017-12-07. <a href="https://web.archive.org/web/20151014173331/http://www.census.gov/hhes/www/income/publications/cpsdataquality101504.pdf" target="_blank">https://web.archive.org/web/20151014173331/http://www.census.gov/hhes/www/income/publications/cpsdataquality101504.pdf</a> <a href="#fnref:1" class="footnote-back-ref">↩</a></p></li>
<li id="fn:2"><p>Ruser, John; Pilot, Adrienne; Nelson, Charles. "Alternative Measures of Household Income: BEA Personal Income, CPS Money Income, and Beyond" (PDF). U.S. Bureau of Labor Statistics. Archived from the original (PDF) on 2014-06-11. Retrieved 2013-08-23. <a href="https://web.archive.org/web/20140611175537/http://www.bls.gov/bls/fesacp1061104.pdf" target="_blank">https://web.archive.org/web/20140611175537/http://www.bls.gov/bls/fesacp1061104.pdf</a> <a href="#fnref:2" class="footnote-back-ref">↩</a></p></li>
<li id="fn:3"><p>https://portal.wsiz.rzeszow.pl/plik.aspx?id=12166 [dead link] <a href="https://portal.wsiz.rzeszow.pl/plik.aspx?id=12166" target="_blank">https://portal.wsiz.rzeszow.pl/plik.aspx?id=12166</a> <a href="#fnref:3" class="footnote-back-ref">↩</a></p></li>
<li id="fn:4"><p>"Research Publications". www.parl.gc.ca. Archived from the original on 21 August 2007. Retrieved 27 May 2017. <a href="https://web.archive.org/web/20070821132452/http://www.parl.gc.ca/information/library/PRBpubs/prb0520-e.htm" target="_blank">https://web.archive.org/web/20070821132452/http://www.parl.gc.ca/information/library/PRBpubs/prb0520-e.htm</a> <a href="#fnref:4" class="footnote-back-ref">↩</a></p></li>
<li id="fn:5"><p>"31 CFR 285.11". Legal Information Institute. Cornell University. Retrieved June 29, 2012. <a href="https://www.law.cornell.edu/cfr/text/31/285.11" target="_blank">https://www.law.cornell.edu/cfr/text/31/285.11</a> <a href="#fnref:5" class="footnote-back-ref">↩</a></p></li>
<li id="fn:6"><p>"ECB guide to internal models" (PDF). European Central Bank. p. 50. The consumer leverage ratio can be calculated as the ratio of total household debt to disposable personal income. <a href="https://www.bankingsupervision.europa.eu/framework/legal-framework/public-consultations/pdf/internal_models_risk_type_chapters/ssm.guide_to_internal_models_risk_type_chapters_201809.en.pdf" target="_blank">https://www.bankingsupervision.europa.eu/framework/legal-framework/public-consultations/pdf/internal_models_risk_type_chapters/ssm.guide_to_internal_models_risk_type_chapters_201809.en.pdf</a> <a href="#fnref:6" class="footnote-back-ref">↩</a></p></li>
<li id="fn:7"><p>"Glossary:National disposable income". Eurostat. Retrieved 2021-05-03. <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:National_disposable_income" target="_blank">https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:National_disposable_income</a> <a href="#fnref:7" class="footnote-back-ref">↩</a></p></li>
<li id="fn:8"><p>Linden, Fabian (1998). "A Marketer's Guide to Discretionary Income (abstract)". US Department of Education. Retrieved 2007-12-27. <a href="http://www.eric.ed.gov/ERICWebPortal/custom/portlets/recordDetails/detailmini.jsp?_nfpb=true&_&ERICExtSearch_SearchValue_0=ED310997&ERICExtSearch_SearchType_0=no&accno=ED310997" target="_blank">http://www.eric.ed.gov/ERICWebPortal/custom/portlets/recordDetails/detailmini.jsp?_nfpb=true&_&ERICExtSearch_SearchValue_0=ED310997&ERICExtSearch_SearchType_0=no&accno=ED310997</a> <a href="#fnref:8" class="footnote-back-ref">↩</a></p></li>
<li id="fn:9"><p>"Glossary:National disposable income". ec.europa.eu. Retrieved 2024-11-12. <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:National_disposable_income" target="_blank">https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:National_disposable_income</a> <a href="#fnref:9" class="footnote-back-ref">↩</a></p></li>
</ol>

Disposable income open-in-new

Disposable income