Disposable Income Calculator

Formula

The formula to calculate the disposable income (DI) is:

\[ DI = PI - T + GT \]

Where:

$DI$ is the disposable income
$PI$ is the personal income
$T$ is the taxes paid to the government
$GT$ is the government transfers sent to you from the government

What is Disposable Income?

Disposable income is defined as all of the monetary value available to spend after taxes have been paid. It represents the amount of money an individual has available for spending and saving after accounting for taxes and government transfers.

Example Calculation

Let's assume the following values:

Personal Income (PI) = $50,000
Taxes Paid (T) = $10,000
Government Transfers (GT) = $2,000

Using the formula to calculate the disposable income (DI):

\[ DI = PI - T + GT = 50000 - 10000 + 2000 = 42000 \]

The Disposable Income (DI) is $42,000.