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| Income | 30% rent |
|---|---|
| $30,000 | $750 |
| $45,000 | $1,125 |
| $60,000 | $1,500 |
| $75,000 | $1,875 |
| $90,000 | $2,250 |
| $105,000 | $2,625 |
| $120,000 | $3,000 |
| $135,000 | $3,375 |
| $150,000 | $3,750 |
Where the 30% rule comes from
The guideline traces back to US public-housing policy: the 1969 Brooke Amendment capped public-housing rent at 25% of income, and the cap was raised to 30% in 1981. Today HUD still uses 30% of income as the line for being "cost-burdened" by housing. It is a rule of thumb, not a law.
Three ways to set a rent budget
| Income | 25% rule | 30% rule | 35% stretch | Landlord 40× test |
|---|---|---|---|---|
| $40,000 | $833.33 | $1,000 | $1,166.67 | $1,000 |
| $50,000 | $1,041.67 | $1,250 | $1,458.33 | $1,250 |
| $60,000 | $1,250 | $1,500 | $1,750 | $1,500 |
| $75,000 | $1,562.50 | $1,875 | $2,187.50 | $1,875 |
| $90,000 | $1,875 | $2,250 | $2,625 | $2,250 |
| $120,000 | $2,500 | $3,000 | $3,500 | $3,000 |
Many landlords screen tenants with a 40× test: annual gross income at least 40 times the monthly rent. It lands slightly below 30% of income ($60,000 ÷ 40 = $1,500, vs $1,500 at 30%), which is why the two usually agree.
When to aim below 30%
If you carry student loans, a car payment or credit card debt, or live in a high-cost city with expensive commuting, 30% of gross can be too much. A take-home view helps: the 50/30/20 budget puts all needs (rent, utilities, groceries, minimum debt payments) inside 50% of after-tax pay. Add utilities and renter's insurance to the rent before comparing.
Where the 30% rule comes from
HUD treats households paying more than 30% of income on housing as cost-burdened, and more than 50% as severely cost-burdened. So 30% of gross income is a common ceiling: $60,000 a year supports about $1,500 a month in rent.
What landlords look for
Many landlords want gross income of about 40 times the monthly rent (for $1,500 rent, $60,000 a year), which is the same as the 30% rule. Remember utilities, renters insurance and parking when you budget.
Frequently asked questions
What is the 30% rule?
Spend no more than 30% of gross income on rent, a common US guideline.
Is the 30% rule based on gross or net income?
Gross (before tax). Using take-home pay gives a more conservative budget.
What if two people share rent?
Use combined income for the household budget, but check that each person can cover their share.
What if I have a lot of debt?
Aim lower than 30%; the 50/30/20 budget puts all needs, including rent, at 50% of take-home pay.