Disposable income

Restated, consumption expenditure plus savings equals disposable income[3] after accounting for transfers such as payments to children in school or elderly parents' living and care arrangements.

For the purposes of calculating the amount of income subject to garnishments, United States' federal law defines disposable income as an individual's compensation (including salary, overtime, bonuses, commission, and paid leave) after the deduction of health insurance premiums and any amounts required to be deducted by law.

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.)

For example, people commonly refer to disposable income as the amount of "play money" left to spend or save.

[citation needed] The system of national accounts defined the concept of disposable income for all institutional sectors of the economy.