1. What is the 30% Rent Rule?

The 30% rent rule is a common guideline in Australia suggesting that no more than 30% of your gross monthly income should be spent on rent. This helps ensure financial stability and ability to cover other living expenses.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Salary \) — Your gross monthly income before tax (AUD)
• \( 0.3 \) — The 30% affordability threshold

Explanation: Multiplying your monthly salary by 0.3 gives the maximum recommended rent payment.

3. Importance of Rent Affordability

Details: Maintaining rent at or below 30% of income helps prevent financial stress, allows for savings, and ensures you can cover other essential expenses like food, transportation, and utilities.

4. Using the Calculator

Tips: Enter your gross monthly salary in Australian dollars. 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 experts recommend using net income for more accurate budgeting.

Q2: Does this include utilities?
A: No, the 30% rule generally refers to rent only. Additional housing costs like utilities should be budgeted separately.

Q3: Is this realistic in expensive cities like Sydney?
A: In high-cost areas, many renters exceed 30%, but this may require cutting other expenses or finding additional income sources.

Q4: Does this apply to share housing?
A: Yes, the rule applies to your portion of the rent in shared accommodation.

Q5: What if I have significant other debts?
A: With high debt payments, you may need to spend less than 30% on rent to maintain financial health.