According to the US Census Bureau the median household income for the year 2020 in the United States of America is $67, 521. Determining household income not only serves it purpose in the macroeconomic level by indicating a country’s standard of living, but also in the microeconomic level by indicating how much a family can spend and save or how much they can borrow from the bank.

WHAT IS A HOUSEHOLD INCOME?

A household income is the combined income of each members of the household ages 15 and above. The member of the household need not to be related to the family to become a member of the household. As long as he or she is living in the same dwelling, his or her income will be accounted to.

HOW TO COMPUTE THE HOUSEHOLD INCOME OF A FAMILY?

Simply add the income generated by all the members of the family aged 15 and above before taxes within a 12- month period.

A. SOURCES OF INCOME TO INCLUDE IN THE EQUATION

1. Salary

2. Wages

3. Tips

4. Freelance works earnings

5. Food stamps

6. Welfare payments

7. Social Security payments

8. Pension payments

DIFFERENCE BETWEEN MEDIAN AND AVERAGE HOUSEHOLD INCOME

In calculating the median household income of an area, households with no income is taken into account. In calculating the average household income of an area, households generating 0 amount of income in a specific year is not taken into account.

HOUSEHOLD INCOME, FAMILY INCOME AND PER CAPITA INCOME

Family income refers to the income generated by 2 or more people occupying a household and are related. The need to be relative differentiates it to household income. Per capita income, on the other hand, is the income of an individual in a specific area. Per capita means per individual or per head.