How to Determine Your Income Household Percentile
By Martin Hurley
Updated June 2023
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Your median household income is a measure of where your household income falls in comparison to other households in the United States.
Knowing your percentile can help you understand your financial situation and make informed decisions about budgeting and saving.
Here's how to calculate your median household income and/or percentile...
Determine your household income
The first step in calculating your household income percentile is to determine your household income.
This includes all sources of income for everyone in your household, such as salaries, wages, tips, bonuses, and investment income.
Here is an income and expenses tracker you can print and use for this.
Make sure to include any government assistance or other forms of income as well. Once you have a total household income, you can move on to the next step.
Find the median household income for your area
To determine your household income percentile, you need to know the median household income for your area.
This information can be found through the U.S. Census Bureau or other government websites.
Simply enter your zip code or city and state to find the median household income for your area.
This will give you a benchmark to compare your household income to and determine your percentile.
Divide your household income by the median household income
Once you have found the median household income for your area, you can divide your household income by that number to determine your percentile.
For example, if the median household income in your area is $50,000 and your household income is $75,000, you would divide $75,000 by $50,000 to get 1.5.
This means your household income is 150% of the median household income for your area, putting you in the 75th percentile.
Knowing your household income percentile can help you understand where you stand financially compared to others in your area and can be a useful tool for financial planning.
Multiply the result by 100 to get your household income percentile
Once you have divided your household income by the median household income for your area, you will have a decimal number.
To convert this number into a percentile, simply multiply it by 100.
For example, if your household income is 150% of the median household income for your area, you would multiply 1.5 by 100 to get 150.
This means you are in the 75th percentile for household income in your area.
Understanding your median household percentile (and income) can help you make informed financial decisions and plan for your future.
Compare your percentile to national and local averages
Once you have determined your median household income, it’s important to compare it to national and local averages.
This can give you a better understanding of where you stand financially compared to others in your area and across the country.
You can find this information through government websites or through financial institutions that provide data on income and wealth distribution.
By comparing your percentile to these averages, you can gain valuable insights into your financial situation and make better decisions about future expenses.