How the rent affordability calculator works
The calculator uses the 30 percent rule: rent plus utilities should take no more than 30 percent of your gross monthly income, your income before taxes and deductions. It turns your income into a monthly amount, takes 30 percent of it as your housing budget and subtracts the utilities you pay. What is left is the rent that fits.
Income per year is divided by 12. An hourly wage is multiplied by your hours per week and by 52 weeks, then divided by 12, so $22 an hour at 40 hours a week is $3,813.33 a month. You can change the share from 30 percent to any value; the table always shows 25, 30, 35 and 40 percent next to each other.
Where the 30 percent comes from
The rule started in US public housing. A report by the Congressional Research Service traces it from early observations that households spent about 20 to 25 percent of income on housing. The Brooke Amendment of 1969 capped the rent of public housing tenants at 25 percent of adjusted family income, and in 1981 Congress raised the share to 30 percent for public housing and the Section 8 programs. The same report notes that mortgage lenders, landlords and federal agencies took the 30 percent rule up as a general yardstick.
HUD's glossary of affordable housing terms defines affordable housing as housing on which the occupant pays no more than 30 percent of gross income for housing costs, including utilities. HUD and the Census Bureau call households that spend more than 30 percent of income on housing cost burdened, and more than 50 percent severely cost burdened. In the 2023 American Community Survey, 49.7 percent of renter households were above the 30 percent line.
Why utilities come off the rent
For renters, housing costs mean gross rent: the contract rent plus the utilities the tenant pays. HUD's Housing Choice Voucher program works the same way and looks at the gross rent, rent and utilities together. So a place with a lower rent but separate electricity, gas and water can cost as much as one with a higher rent that includes them. Enter what you expect to pay for utilities each month, or 0 when they are in the rent.
A worked example
You earn $60,000 a year before taxes, which is $5,000 a month. Utilities run about $150 a month, and you pay $300 a month on a car loan.
- Housing budget at 30 percent: $5,000 × 0.30 = $1,500.
- Rent: $1,500 − $150 utilities = $1,350 a month.
- Left of your gross income after rent, utilities and the car loan: $3,200 a month, before taxes.
| Share of income | Rent and utilities | Rent |
|---|---|---|
| 25% | $1,250 | $1,100 |
| 30% | $1,500 | $1,350 |
| 35% | $1,750 | $1,600 |
| 40% | $2,000 | $1,850 |
The other way round: for an apartment at $1,800 a month with $150 in utilities, the income needed at 30 percent is ($1,800 + $150) ÷ 0.30 = $6,500 a month, or $78,000 a year. At 30 percent, the yearly income needed is always 40 times the monthly housing cost, because 12 ÷ 0.30 = 40.
What the 30 percent rule leaves out
The rule is simple, which is why it is used everywhere, but it is a rough guide. It works on gross income, so taxes, retirement savings and health insurance are not taken out first. It ignores your other costs: childcare, a long commute or high debt payments can make 30 percent too much, while a high income can leave plenty of room even above it. Enter your debt payments to see what is left, and compare the result with a budget built on your take-home pay, for example with the budget planner or the paycheck calculator.
A landlord may also have an income requirement of its own, which this calculator does not know. Ask before you apply. When you share a place, the rent split calculator divides the rent by room size, and the rent vs buy calculator compares renting with buying a home.
How to use the rent affordability calculator
- 1Choose Rent I can afford, and enter your gross income per year, month or hour. For an hourly wage, add your hours per week.
- 2Add the utilities you expect to pay and, if you like, your monthly debt payments.
- 3Read the rent at 30 percent, or pick another share. The table shows 25 to 40 percent.
- 4To check a listing, switch to Income needed and enter its rent. Copy the result or share a link.
Sources
- Congressional Research Service, Measuring Housing Affordability, report R49457 (October 1, 2026): the 20 to 25 percent observations, the Brooke Amendment of 1969 (25 percent of adjusted family income), the rise to 30 percent in 1981, the cost-burden bands, and gross rent as contract rent plus utilities
- HUD Archives: Glossary of Terms to Affordable Housing: affordable housing as no more than 30 percent of gross income for housing costs, including utilities
- HUD: Housing Choice Voucher tenants: the family share, usually 30 percent of adjusted monthly income, and the gross rent of rent and utilities
- U.S. Census Bureau, release CB24-150 (September 12, 2024): 49.7 percent of renter households cost burdened in the 2023 American Community Survey, and the 30 and 50 percent definitions
Related guides
- How Much Rent Can I Afford? The 30% Rule in Practice
- Exempt vs Non-Exempt Employees: Who Gets Overtime
- Minimum Wage by State 2026: Every Rate in One Table
Frequently asked questions
How much rent can I afford on my salary?
A common rule of thumb is up to 30 percent of your gross monthly income for rent and utilities together. On $60,000 a year, or $5,000 a month before taxes, that is $1,500 for housing. If utilities run about $150, the rent itself should stay near $1,350. Enter your own income and costs above to see your number.
Where does the 30 percent rule come from?
It comes from US public housing. The Brooke Amendment of 1969 capped public housing rent at 25 percent of adjusted family income, and in 1981 Congress raised that share to 30 percent for public housing and Section 8, according to the Congressional Research Service. HUD still calls households that pay more than 30 percent of income for housing cost burdened.
Do utilities count toward the 30 percent?
Yes, in HUD's definition. Housing costs for renters are gross rent: the rent plus the utilities the tenant pays. That is why this calculator subtracts your utilities from the housing budget. If your rent already includes all utilities, enter 0 for utilities.
Should I use gross income or take-home pay?
The 30 percent rule and HUD's cost-burden figures use income before taxes, so the calculator does too. Your budget runs on take-home pay, though, and 30 percent of gross pay can be 40 percent or more of what lands in your account. Check the result against a budget built on your net pay.
How much do I need to earn for a given rent?
Switch to Income needed. At 30 percent, divide rent plus utilities by 0.3. A $1,800 rent with $150 in utilities needs $6,500 a month, or $78,000 a year before taxes. The table shows the same rent at 25, 35 and 40 percent of income.
Is 40 percent of income for rent too much?
By HUD's definition, anyone paying more than 30 percent of income for housing is cost burdened, and more than 50 percent is severely cost burdened. Many renters pay more than 30 percent: the Census Bureau counted 49.7 percent of renter households above that line in 2023. Whether it works for you depends on your other costs, debts and savings.
Is this financial advice?
No. It is an estimate from the numbers you enter and a rule of thumb. It does not know your taxes, savings, local prices or what a landlord will ask for. Use it to set a range before you look for a place.