Calculate what percentage of your salary goes to rent and whether your housing costs are affordable based on the 30% rule.
Cost-Burdened
| Annual Salary | $70,000 |
| Monthly Gross Income | $5,833 |
| Monthly Take-Home (est.) | $4,005 |
| Monthly Rent | $1,800 |
| Total Housing Cost | $1,950 |
| Rent % of Gross Income | 30.9% |
| Rent % of Take-Home | 44.9% |
| Housing % of Gross | 33.4% |
| Affordable Rent (30% rule) | $1,750 |
| Salary Needed (40x rule) | $72,000 |
| Monthly Surplus after Housing | $2,055 |
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Rent % of Income = Monthly Rent ÷ Monthly Gross × 100
Affordable Rent (30% rule) = Monthly Gross × 30%
Salary Needed = Monthly Rent × 40
The classic guideline: spend no more than 30% of gross monthly income on rent. Spending above 30% is considered 'cost-burdened.' Above 50% is severely cost-burdened.
In expensive cities, many people spend 35-50% on rent by necessity. A better target is 30% of net (take-home) income, not gross, leaving room for savings and other expenses.
Multiply your monthly rent by 40 (or divide by 0.025) to find the recommended annual salary. For $2,000/month rent, you'd want $80,000/year in gross income.
Besides rent, budget for utilities (10-15% of rent), renters insurance (~$15-20/month), parking, and moving costs. Total housing often runs 35-40% of income.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.