How rent-to-income is calculated
Divide the monthly rent by the applicant's gross monthly income and turn it into a percentage. Gross means before tax, which is the convention almost every landlord and every screening report uses, so using net income instead will make every applicant look worse than the standard you are comparing them against.
The same number gets stated a second way as an income multiple. An applicant earning three times the rent is at roughly 33%. That is where the common "three times the rent" requirement comes from, and this calculator shows both so you can talk in whichever one your applicant understands.
- Rent-to-income = monthly rent divided by gross monthly income
- Income multiple = gross monthly income divided by monthly rent
- Three times the rent is roughly the same thing as 33%
Apply the same number to every applicant, in writing
Fair housing law is not about whether your standard is generous. It is about whether it is applied consistently. Pick your income threshold, write it into your published rental criteria, show it to every applicant before they pay anything, and then hold every applicant to it. A threshold you bend for some applicants and not others is the version that creates legal exposure.
That also means deciding your rules in advance for the situations that come up constantly: how you treat a co-signer, how you count several roommates' incomes, what you accept as proof of income for somebody self-employed, and whether housing assistance counts toward income. In some places, refusing to count a housing voucher as income is itself unlawful. Write the answers down before an applicant makes you decide on the spot.
What the ratio cannot see
Income is one input. An applicant at a comfortable ratio with heavy existing debt can be tighter than an applicant at a stretched ratio with none. Rent-to-income also says nothing about payment history, which is usually the better predictor of whether rent will arrive on time.
Use it as the first gate, then verify the income you were given. Pay stubs, an offer letter, tax returns for somebody self-employed, or a bank statement showing regular deposits. A ratio built on an unverified number is not a screening step, it is a hope.
A worked example
An applicant earning $5,400 a month before tax applies for a room renting at $1,750 a month.
- Gross monthly income
- $5,400
- Monthly rent
- $1,750
- Income multiple
- 3.09 times the rent
The same applicant looking at $2,200 rent would be at 40.7%, which is where the same income stops comfortably covering the same lease.
Common questions
Should I use gross or net income?
Gross, meaning before tax. Every common benchmark, including the three-times-the-rent convention, is built on gross income. Using take-home pay against a gross-income threshold quietly makes your standard far stricter than you think it is.
How do I handle roommates applying together?
Decide in advance and write it down. Some landlords add all incomes and test the combined figure against the full rent. Others test each person against their own share, which is the natural fit when each room has its own lease. Both are defensible; switching between them applicant by applicant is not.
What if an applicant has a co-signer?
Publish a separate, higher threshold for co-signers, because a co-signer is paying their own housing costs as well as backstopping yours. Whatever multiple you settle on, apply it to every co-signer identically and make sure the co-signer signs the lease or a guaranty rather than only being named on it.
Can I turn someone down purely on income?
You can apply a consistent, published income standard to every applicant. What you cannot do is apply it selectively, or use it as cover for a decision actually based on a protected characteristic. Publish the criteria, keep a record of how each applicant measured against them, and give the same answer for the same numbers every time.
These calculators are educational and are not legal, tax, lending, or accounting advice. Rules vary by state and by city, and your lease governs your own properties. Check your own requirements before relying on any number here.