Disposable income
Gross pay minus tax and National Insurance. This is the official meaning used by the ONS and economists.
BUDGETING GUIDE
What is disposable income?
Disposable income is what you have left after Income Tax and National Insurance, in other words your take-home pay. On a £35,000 salary that is about £28,720 a year or £2,393 a month. What is left after essential bills is called discretionary income.
Last reviewed: October 2026Figures: worked out with the WorthChex calculators
TWO MEANINGS
Disposable vs discretionary income.
Discretionary income
Disposable income minus essentials like housing, bills and food. This is the money you can choose how to spend or save.
People often say “disposable income” when they mean the second one. Lenders, for example, look at what is left after your commitments when deciding what you can afford.
BY SALARY
Disposable income at common salaries, 2026/27.
| Salary | Tax and NI a year | Disposable a year | Disposable a month |
|---|---|---|---|
| £20,000 | £2,080 | £17,920 | £1,493 |
| £25,000 | £3,480 | £21,520 | £1,793 |
| £30,000 | £4,880 | £25,120 | £2,093 |
| £40,000 | £7,680 | £32,320 | £2,693 |
| £50,000 | £10,480 | £39,520 | £3,293 |
| £60,000 | £14,643 | £45,357 | £3,780 |
England, Wales and Northern Ireland; standard tax code; no pension or student loan. A workplace pension and student loan would reduce these figures.
WORKED EXAMPLE
From salary to spending money.
- Gross salary: £35,000 a year, or £2,917 a month.
- Disposable income: after £374 Income Tax and £150 National Insurance, £2,393 a month.
- Essentials: rent, Council Tax, energy, food, transport and phone add up to an example £1,650.
- Discretionary income: £2,393 − £1,650 = £743 a month for saving, debt repayments and spending.
Why it matters: a £250 car finance payment looks small against a £2,917 gross salary. Against £743 of discretionary income, it is 34% of everything you have left.
INCREASE IT
Ways to raise your disposable income.
- Check your tax code on your payslip. A wrong code (like an emergency code) can overtax you; HMRC refunds overpaid tax.
- Use salary sacrifice for pension saving to cut tax and National Insurance. See salary sacrifice explained.
- Claim what you are owed: Marriage Allowance, uniform tax relief, working-from-home relief where eligible, and benefits like Child Benefit.
- Cut essentials: switch energy tariffs, broadband and insurance at renewal, and check whether you qualify for a Council Tax discount.
Work out yours
Get your exact figure in the take-home pay calculator, then see what is left after bills in the affordability calculator.
FREQUENT QUESTIONS
Disposable income FAQs
Is disposable income the same as net income?
For most employees, yes. Both mean pay after Income Tax and National Insurance. Some definitions also take off pension contributions and student loan repayments.
Do benefits count as disposable income?
In official statistics, yes: the ONS includes benefits and tax credits in household disposable income.
What is a good amount of discretionary income?
There is no fixed figure, but if less than about 10–20% of take-home pay is left after essentials, it is hard to save and any price rise hurts. That is a sign to look at the biggest costs first.
ONS: household disposable income · GOV.UK Income Tax rates. Figures are worked examples for planning, not financial advice.