# Disposable Income

*Everyday Money — Finicade finance glossary*

Disposable income is what's left after tax — the money you actually have available to spend or save. Economists use it as the headline measure of household spending power, and it's the base for savings-rate statistics. Note the trap in the everyday use of the word: 'disposable' does not mean 'spare'. Rent, food and utilities all come out of disposable income. The money genuinely free to allocate is discretionary income, which is a much smaller number.

**Formula:** `Disposable income = Gross income − Taxes`

**Also known as:** after-tax income, disposable earnings

**Related terms:** [Discretionary Income](https://finicade.com/glossary/discretionary-income), [Take-Home Pay](https://finicade.com/glossary/take-home-pay), [Gross Income](https://finicade.com/glossary/gross-income), [Budget](https://finicade.com/glossary/budget)

Source: https://finicade.com/glossary/disposable-income