1. What is the Rent Affordability Rule?

The general rule suggests that you should spend no more than 30% of your gross monthly income on rent. This helps ensure you have enough left for other living expenses and savings.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Income \) — Your gross monthly income in AUD
• \( 0.3 \) — The recommended 30% threshold

Explanation: This calculation provides the maximum recommended rent payment based on your income level.

3. Importance of Rent Affordability

Details: Maintaining the 30% threshold helps prevent financial stress, ensures you can cover other expenses, and allows for savings. In expensive cities like Sydney, this becomes particularly important.

4. Using the Calculator

Tips: Enter your gross monthly income in AUD. The calculator will show the maximum recommended rent payment according to the 30% rule.

5. Frequently Asked Questions (FAQ)

Q1: Is the 30% rule before or after tax?
A: The rule typically uses gross (before tax) income, but some prefer to calculate based on net income for more precise budgeting.

Q2: What if I can't find housing at 30% in Sydney?
A: Sydney's high cost of living often pushes rent above 30%. In such cases, consider sharing accommodation or living further from the city center.

Q3: Does this include utilities?
A: The 30% rule typically refers to rent only. Additional costs like utilities, internet, etc. should be budgeted separately.

Q4: How does this work for share houses?
A: Each housemate should ideally spend no more than 30% of their individual income on their portion of the rent.

Q5: What if my income varies?
A: Use your average monthly income, or calculate based on your lowest expected income to be safe.