Net Income Calculator Formula
Understand the math behind the net income calculator. Each variable explained with a worked example.
Formulas Used
Net Income (Surplus)
net_income = monthly_income - total_expensesTotal Expenses
expense_total = total_expensesExpense-to-Income Ratio
expense_ratio = total_expenses / monthly_income * 100Variables
| Variable | Description | Default |
|---|---|---|
monthly_income | Monthly Income(USD) | 5000 |
housing | Housing (Rent/Mortgage)(USD) | 1500 |
utilities | Utilities & Bills(USD) | 300 |
food | Food & Groceries(USD) | 500 |
transport | Transportation(USD) | 400 |
other_expenses | Other Expenses(USD) | 600 |
total_expenses | Derived value= housing + utilities + food + transport + other_expenses | calculated |
How It Works
How to Calculate Net Income
Subtract all monthly expenses from your monthly income to find your surplus (or deficit).
Formula
Net Income = Monthly Income - Total Expenses
A positive number means you have money left for savings or discretionary spending. A negative number means you are spending more than you earn.
Worked Example
$5,000 monthly income with $3,300 in total expenses.
monthly_income = 5000housing = 1500utilities = 300food = 500transport = 400other_expenses = 600
- 01Total expenses = $1,500 + $300 + $500 + $400 + $600 = $3,300
- 02Net income = $5,000 - $3,300 = $1,700
- 03Expense-to-income ratio = $3,300 / $5,000 = 66.0%
Ready to run the numbers?
Open Net Income Calculator