What this calculator does
The most common guideline is to keep rent at or below 30% of your gross income. HUD defines cost-burdened households as those paying more than 30% of their income for housing, and severe rent burden is usually described as paying more than 50%. This page converts an hourly wage to yearly pay, applies the 30% line, and adds a 50/30/20 budget view based on your take-home pay.
How it's calculated
Monthly gross = yearly pay ÷ 12
Rent at 30% = monthly gross × 0.30
50/30/20 needs budget = take-home pay × 50% (rent and all other needs)
Income needed for a rent = rent × 12 ÷ 0.30 = rent × 40
Worked example
At $22 an hour for 40 hours a week, yearly pay is 22 × 40 × 52 = $45,760, or $3,813.33 a month. Thirty percent of that is $1,144 a month. At $20 an hour, it's $1,040. If take-home pay is 80% of gross ($3,050.67), the 50/30/20 rule gives $1,525.33 for all needs, so rent of $1,144 would leave $381 for groceries, utilities, transportation and other essentials.
Rent at 30% by salary
| Yearly salary | Monthly gross | Max rent (30%) |
|---|---|---|
| $30,000 | $2,500 | $750 |
| $40,000 | $3,333 | $1,000 |
| $50,000 | $4,167 | $1,250 |
| $60,000 | $5,000 | $1,500 |
| $75,000 | $6,250 | $1,875 |
| $100,000 | $8,333 | $2,500 |
The calculator's results include a full table by hourly wage, from $15 to $40.
The 50/30/20 view
The 50/30/20 budget splits take-home pay into 50% for needs, 30% for wants and 20% for savings and debt payoff. It's a stricter test in high-rent areas, because rent has to fit inside the needs half along with food, utilities, insurance and transport. Enter your other monthly needs to see what's left for rent.
Limitations
- The 30% line is a guideline, not a law. Landlords set their own income requirements, so ask before you apply.
- Take-home pay depends on taxes and deductions; use your pay stub rather than the default 80%.
- Utilities, renter's insurance and parking add to housing costs; count them when you compare a rent with the 30% line.