Disposable income

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Disposable income is total personal income minus current taxes on income. In national accounting, personal income minus the taxes on that income equals disposable income. Subtracting personal outlays for food, housing, transportation, and other forms of personal consumption expenditure yields personal savings. The U.S. Bureau of Economic Analysis defines disposable personal income as personal income less personal current taxes. In July 2026, it estimated disposable personal income rose 0.5 percent from the preceding month, while personal saving was $712.0 billion and the personal saving rate, measured as personal saving as a percentage of disposable personal income, was 3.0 percent. Restated, consumption expenditure plus savings equals disposable income after accounting for transfers such as payments to children in school or elderly parents' living and care arrangements. The marginal propensity to consume (MPC) is the fraction of a change in disposable income that is consumed. For example...

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