Disposable income

Disposable income can be understood as: • National disposable income of a country: The national income minus current transfers (current taxes on income, wealth etc., social contributions, social benefits and other current transfers), plus current transfers receivable by resident units from the rest of the world. • Disposable personal (or family/household) income: The income that individuals or households have for their spending. ==Discretionary income==

Discretionary income is disposable income (after-tax income), minus all payments that are necessary to meet current bills. It is total personal income after subtracting taxes and minimal survival expenses (such as food, medicine, rent or mortgage, utilities, insurance, transportation, property maintenance, child support, etc.) to maintain a certain standard of living. Expenses that persist with zero income are termed autonomous consumption. Discretionary income is the amount of an individual's income available for spending after the essentials have been taken care of: \text{Discretionary income} := (\text{Gross income} - \text{taxes}) - \text{all compelled payments} := (\text{Disposable income}) - \text{autonomous spending} The term "disposable income" is often incorrectly used to denote discretionary income. For example, people commonly refer to disposable income as the amount of "play money" left to spend or save. == In the national accounts ==

The system of national accounts defined the concept of disposable income for all institutional sectors of the economy. For corporations it is equal to profit retained, and for the government it is equal to taxes + income received from public corporation. The sum of disposable income across all institutional sectors is called the national disposable income. == See also ==