Expense to Income Ratio Calculator

Formula

The formula to calculate the expense to income ratio is:

\[ \text{EIR} = \frac{\text{E}}{\text{I}} \times 100 \]

Where:

$\text{EIR}$ is the expense to income ratio (%)
$\text{E}$ is the total monthly expenses (\$)
$\text{I}$ is the total monthly income (\$)

What is Expense to Income Ratio?

The expense to income ratio is a measure of the proportion of your income that goes towards expenses. It is calculated by dividing your total monthly expenses by your total monthly income and then multiplying by 100 to express the result as a percentage. This ratio is important for budgeting and financial planning, as it helps you understand how much of your income is being used to cover expenses.

Example Calculation 1

Let's assume the following values:

Total Monthly Expenses (E) = $2000
Total Monthly Income (I) = $5000

Using the formula:

\[ \text{EIR} = \frac{2000}{5000} \times 100 = 40\% \]

The Expense to Income Ratio is 40%.

Example Calculation 2

Let's assume the following values:

Total Monthly Expenses (E) = $3000
Total Monthly Income (I) = $6000

Using the formula:

\[ \text{EIR} = \frac{3000}{6000} \times 100 = 50\% \]

The Expense to Income Ratio is 50%.