Household income is the total gross income earned by all people who live together in a single housing unit. It’s a broad measure of the financial resources available to a household over a year and is used by governments, researchers, and service providers to assess living standards, eligibility for benefits, and economic trends.
Key Takeaways
– Household income is usually measured as annual gross income from all members of a household.
– It can include wages and salaries, self‑employment income, investment and rental income, Social Security and other benefits, and unemployment compensation.
– Definitions and rules differ by agency and program — some exclude certain household members or types of income.
– Median household income (the midpoint) is generally a better indicator of a “typical” household than average (mean) income, which can be skewed by outliers.
How Household Income Works
– Basic concept: Add up the gross annual income (before taxes and deductions) of each household member included in the household definition for the relevant purpose.
– Sources commonly included: wages, salary, tips, self‑employment profits, rental income, interest and dividends, pension and Social Security benefits, and unemployment benefits.
– Sources commonly excluded (in some contexts): child support, gifts, certain veterans’ disability payments, and—under some rules—alimony for divorces finalized after Jan. 1, 2019.
– Who counts as part of the household depends on the program or dataset. Examples:
• U.S. Census Bureau: counts household members age 15 and older when reporting income.
• Internal Revenue Service: for some purposes ignores dependents whose earnings are below the tax filing threshold.
• Affordable Care Act (ACA): uses household as yourself, your spouse, and your tax dependents.
• SNAP/CalFresh: often counts people who live together and purchase and prepare food together; state rules can vary.
Tip
Before you calculate household income, identify the definition the program or dataset uses. The same household can have different reported incomes depending on whether the Census, IRS, ACA, or a state benefit program’s rules are applied.
Practical steps: How to calculate household income for different purposes
1. For general comparison (informal)
• Gather gross annual amounts for all people who live in the home and share finances.
• Add wages, self‑employment income, rental income, investment income, benefits, and other taxable income.
• Use the sum as your household income for informal budgeting and peer comparisons.
2. For Census/statistical comparisons
• Include members age 15 and older (Census rules).
• Use gross money income (pre‑tax).
• Compare to published median/average figures for the desired year/state.
3. For ACA premium tax credit eligibility (HealthCare.gov rules)
• Household = you, your spouse (if married), and your tax dependents.
• Include expected gross income for the coverage year (wages, self‑employment, unemployment, Social Security, etc.).
• Exclude types the ACA omits (e.g., some nontaxable income may be excluded — follow HealthCare.gov guidance).
• Use the HealthCare.gov calculator or marketplace application to estimate eligibility.
4. For SNAP/CalFresh (or other state benefit programs)
• Confirm state rules: many states include household members who live together and purchase and prepare meals together; some states count children under a certain age regardless.
• For self‑employment income, some programs allow a standard deduction (for example, a 40% deduction for business income in some CalFresh calculations) instead of itemizing expenses—check local guidance.
• Aggregate gross income after allowed deductions to test eligibility.
5. For tax or IRS‑related purposes
• Use tax rules for dependents and filing thresholds. The IRS may not treat low‑earning dependents the same as census or benefit programs.
• For self‑employment, compute net self‑employment income per tax rules (subject to different adjustments for benefits/assistance calculations).
Example: How the same household can produce different household income totals
– Scenario: Person A earns $90,000 salary; Person B (spouse) earns $50,000 in self‑employment net profit; household receives $10,000 rental income from an investment property; a 14‑year‑old child earns $5,000 babysitting during summer.
• Census approach (excludes under‑15): total = $90,000 + $50,000 + $10,000 = $150,000 (child excluded)
• CalFresh (California SNAP) approach (may include household members under 22 who live with parents): total = $90,000 + $50,000 + $10,000 + $5,000 = $155,000
Average Household Income vs. Median Household Income
– Average (mean) household income: sum of all household incomes divided by number of households. Sensitive to very high or very low values.
– Median household income: the middle household income — 50% of households earn more, 50% earn less. Less affected by outliers and generally a better indicator of a typical household’s economic position.
Fast Fact
– As of 2023 (most recent reported data), the median household income in the United States was $80,610; the average household income was $114,500. To be among the top 10% of U.S. households in 2023, a household needed an income of about $234,900. (U.S. Census Bureau, 2023)
Real Median Household Income by State
– The Federal Reserve Bank of St. Louis (FRED) and the U.S. Census Bureau publish state‑level median household income series. State medians vary substantially based on local cost of living, labor markets, and demographics. Check FRED or Census tables for the most recent state data.
What’s the Difference Between Personal and Household Income?
– Personal (individual) income: the total earnings and income sources for a single person.
– Household income: the combined income of all people living together in the same residence (as defined by the relevant program).
– Use personal income when assessing an individual’s finances; use household income when assessing combined resources or eligibility for household‑level programs.
Does Household Income Include Roommates?
– For broad economic statistics, surveys may include all people living in the same housing unit (including unrelated roommates) if they share the residence.
– For benefit eligibility (e.g., ACA), roommates typically are not part of your household unless they are tax dependents or are otherwise considered part of your tax household. Always check the specific program’s definition.
What Is the Median Household Income in the United States?
– 2023 median household income (U.S. Census Bureau reported): $80,610.
What Is the Average Household Income in the United States?
– 2023 average (mean) household income: $114,500.
The Bottom Line
Household income is a useful, but definition‑dependent, measure of household economic resources. It’s routinely used for policy, eligibility determinations, and economic analysis. To use household income correctly, determine which definition applies in your situation (Census, IRS, ACA, state program), list and sum the included income types, and apply any program‑specific adjustments or exclusions.
Practical checklist before you report or compare household income
– Identify the purpose (statistical comparison, tax filing, benefit application).
– Confirm which household members are counted.
– List all income sources for counted members and use gross annual amounts unless instructed otherwise.
– Apply any allowable deductions or exclusions (e.g., certain business deductions, program exclusions).
– Use official calculators (HealthCare.gov, state benefit sites) when available.
Sources and further reading
– U.S. Census Bureau, “Median Household Income,” and Income in the United States: 2023
– HealthCare.gov, “Count Income & Household Size”
– Internal Revenue Service, “Household Income” guidance
– County of Los Angeles Dept. of Public Social Services, “CalFresh Eligibility Criteria” — (CalFresh guidance)
– U.S. Department of Agriculture, Food and Nutrition Service, “SNAP FAQ: Who is in a SNAP household?”
– Legal Services of Northern California, “How Self-Employment Income Is Counted”
– Federal Reserve Bank of St. Louis (FRED), Real Median Household Income by State —
Related topics
– Median income vs. mean income
– Personal income and compensation
– Calculating self‑employment income for benefits or taxes
– Household poverty thresholds and cost‑of‑living adjustments
– Walk through a step‑by‑step calculation for your specific household and a specific program (ACA, SNAP, tax filing).
– Pull the latest state median household incomes for a list of states you care about.