Meaning & use
disposable income
Last updated
Meanings
noununcountablefinance
The money a person or household has to spend or save after income taxes have been taken out.
Grammar: Uncountable: more disposable income, not a disposable income.
Patterns
- have disposable income
- disposable income of something
Families with more disposable income tend to eat out more often.
A rise in taxes reduced our disposable income this year.
Students often have little disposable income.
noununcountableinformal
In everyday use, the money left over after paying for essentials such as housing and food, which you can spend freely.
Grammar: Informal use of the same idea: what is left to spend on extras.
Patterns
- have disposable income
- spend disposable income on something
Once the rent is paid, I have little disposable income left for hobbies.
They spend most of their disposable income on travel.
Common combinations
- rising disposable income
- Rising disposable income boosted retail sales.
- household disposable income
- Household disposable income fell for the second year.
- have disposable income
- People who have disposable income can buy more luxuries.
- spend disposable income
- Young adults spend their disposable income on streaming and games.
- limited disposable income
- Retirees on limited disposable income cut back on extras.
Synonyms and how they differ
- take-home pay
- Take-home pay is the salary after tax from a job, while disposable income can include other sources such as benefits.
- spending money
- Spending money is a casual term for small amounts to spend, whereas disposable income is a technical economic term.
- discretionary income
- Discretionary income is what remains after essential bills too, while disposable income is just after tax.
- net income
- Net income is a broader accounting term that applies to firms as well as households.
Opposites
Word family
- dispose verb
- to throw away or arrange
- disposable adjective
- able to be thrown away or freely used
- disposal noun
- the act of getting rid of something
- income noun
- money received regularly
Commonly confused: disposable income or discretionary income? disposable income or gross income?
disposable income vs discretionary income
Discretionary income is left after essential costs, while disposable income is left after taxes.
disposable income vs gross income
Gross income is the total before taxes, so it is larger than disposable income.
Practice
After taxes, the couple had a ___ of about 3,000 dollars a month.
Choose one answer.
Disposable income is what remains after taxes. Gross income is counted before taxes, so it does not fit.
Make it your own
Write a sentence using “disposable income”, then check it and compare it with the examples above.