Section 8 tenant share calculator.

Where the 30 percent figure comes from

The rule is in federal law, not a budgeting tip. For a voucher family, Section 8(o)(2) of the US Housing Act (42 U.S.C. 1437f(o)(2)) makes the monthly assistance payment the amount by which the rent, including the allowance for tenant-paid utilities, exceeds the greatest of 30 percent of monthly adjusted income, 10 percent of monthly income, or the portion of welfare assistance designated for housing costs. Where the rent is above the payment standard, the payment is instead the amount by which the payment standard exceeds that greatest amount. Section 3 of the same Act (42 U.S.C. 1437a(a)(1)) uses the same three-part test for rents in other assisted housing, and its amendment notes record that a 1979 amendment replaced a one-quarter-of-income rule with 25 percent for very low income families and 30 percent for others. HUD's regulations turn the test into the "total tenant payment" in 24 CFR 5.628, which adds the agency's minimum rent. The Census Bureau, describing HUD guidance, uses the same 30 percent line when it calls renter households that spend more than that on housing "cost-burdened" and those above 50 percent "severely cost-burdened". Over 21 million renter households were cost-burdened in 2023, about 49.7 percent of the 42.5 million for whom rent burden is calculated.

The four steps the calculator follows

1. Total tenant payment. The highest of 30 percent of monthly adjusted income, 10 percent of monthly gross income and the minimum rent (24 CFR 5.628, rounded to the nearest dollar). The welfare-assistance option is not modelled.
2. Payment standard for the family. The lower of the standard for the family's voucher size and the standard for the size of the unit actually rented (24 CFR 982.505(c)).
3. Housing assistance payment. The lower of the payment standard minus the tenant payment, and the gross rent minus the tenant payment (982.505(b)).
4. Family share. The gross rent minus the subsidy. It equals the tenant payment when the rent is at or below the payment standard, and it is higher by the excess when the rent is above it.

What "adjusted income" means

Adjusted income is annual income after the deductions in 24 CFR 5.611. The mandatory ones are a set amount for each dependent, a set amount for an elderly or disabled family, unreimbursed medical and attendant-care expenses of an elderly or disabled family above 10 percent of annual income, and reasonable child care expenses needed to work or study. The dependent and elderly or disabled amounts are written in the regulation as $480 and $525 and HUD adjusts them each year with a price index, so use the figure your agency applies. An agency may also adopt additional deductions. Enter monthly adjusted income in the first box; the calculator does not compute deductions for you.

The 40 percent limit at move-in

A family can choose a unit that costs more than the payment standard. HUD limits how far: at the time the agency approves a tenancy for initial occupancy, where the gross rent exceeds the payment standard, the family share may not exceed 40 percent of adjusted monthly income (24 CFR 982.508). The test uses income verification received no earlier than 60 days before the voucher was issued. The calculator reports whether the lease you entered clears that limit.

Worked example (hypothetical numbers)

A family has adjusted income of $1,500 a month and gross income of $1,800. Thirty percent of adjusted income is $450 and ten percent of gross income is $180, so the tenant payment is $450. The payment standard is $1,400 and the gross rent is $1,600. The subsidy is the lower of $1,400 minus $450 = $950 and $1,600 minus $450 = $1,150, so it is $950. The family pays $1,600 minus $950 = $650, which is 43.3 percent of adjusted income. Because the rent is above the payment standard, the 40 percent cap applies: 40 percent of $1,500 is $600, so a $650 share would not be approved at move-in. Lowering the rent to $1,550 gives a share of $600 and the lease passes. The figures are invented. Real payment standards and rents depend on the agency.

Common mistakes

• Using gross income for the 30 percent test. The test uses adjusted income, which is after deductions, while the 10 percent test uses gross income.
• Comparing contract rent with the payment standard. Gross rent includes the utility allowance, so a unit with tenant-paid utilities costs more than its rent.
• Assuming the family pays only the tenant payment. If rent exceeds the payment standard the family pays the excess too.
• Treating the 40 percent limit as ongoing. It applies when the agency approves the tenancy, not at later rent changes.
• Applying this to public housing or project-based assistance, which have their own rent rules and flat rents.

Who this is for

Voucher holders comparing units, landlords estimating what a family and the agency will each pay, caseworkers explaining the formula, and renters who have heard of "the 30 percent rule" and want to see where it sits in federal law.

What this page does not cover

• Eligibility, income limits, waiting lists, rent reasonableness, inspections or the interim recertification rules.
• Your agency's actual payment standard, minimum rent or additional deductions. Ask the agency for its administrative plan.
• Private-market affordability. A general rent-to-income budget is a rule of thumb, not a law, and this page does not test it.
• Public housing, project-based vouchers and other HUD programs with different formulas.
• It is general information, not housing or legal advice. Nothing you enter leaves your browser.