Question

Write short note on personal disposable income.

Answer 1

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Disposable income, sometimes called disposable personal income (DPI), is the total earnings a household makes that are available to save or spend after taxes have been paid. In other words, it’s a household’s take home pay after taxes and other employee deductions have been taken out of their paychecks.



What is the definition of disposable income? Disposable personal income is the amount of money that you receive in your paycheck. This amount is net of any income taxes, payroll taxes, health care deductions, retirement savings deductions, and other items taken out of your paycheck like cafeteria plans. This is your take home pay that you can choose to spend or save.

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Answer 2

Personal disposable income is the amount of money a person has to spend after taxes and any other compulsory withholding from the paycheck.

• Personal disposable income is the total amount that someone has to spend on necessities, such as housing and food, after taxes.
• Household net disposable income is calculated by taking the sum of household income, wages, and other money earned and subtracting all taxes paid on income.
• It is calculated as - Gross wages - Taxes
• It is often used by economists to find out the money that is available to spend in the specific area.