How to split bills based on income, with the math
Quick answer
Divide each person's income by everyone's combined income, then multiply by the bill. On an $1,800 bill with incomes of $3,000 and $5,000, the shares are 37.5 percent and 62.5 percent, which is $675 and $1,125. The lower earner pays $225 less than an equal $900 split. Use the same income figure for everyone.
Key points
- Share = bill times your income divided by everyone's income. On $1,800 with incomes of $3,000 and $5,000, that is $675 and $1,125.
- Three people on $2,000, $3,000 and $5,000 pay 20, 30 and 50 percent, which is $360, $540 and $900 of an $1,800 bill.
- Use the same basis for everyone: gross or net, monthly or yearly. Mixing them changes the split.
- If a percent is not whole, type exact amounts. EvenOut takes either Percent or Exact amounts for each expense.
On this page
What is the formula for splitting bills by income?
Each person’s share is the bill times their income, divided by everyone’s income added together. In words: work out what fraction of the group’s total income is yours, then pay that fraction of the bill. The shares always add back to the bill, because the fractions add to one. The method is called a proportional split.
How does it work for two people?
Say two people share an $1,800 bill, and their incomes are $3,000 and $5,000 a month.
- Add the incomes. $3,000 + $5,000 is $8,000.
- Find each person’s fraction. $3,000 divided by $8,000 is 0.375, or 37.5 percent. $5,000 divided by $8,000 is 0.625, or 62.5 percent.
- Multiply by the bill. $1,800 times 0.375 is $675. $1,800 times 0.625 is $1,125.
- Check. $675 + $1,125 is $1,800.
An equal split would be $900 each, so the lower earner pays $225 less and the higher earner pays $225 more. The difference is the same on both sides, because the total does not change.
How does it work for three people?
The same steps work for any number of people. Say three people on $2,000, $3,000 and $5,000 share the same $1,800 bill.
| Person | Income | Share of income | Pays |
|---|---|---|---|
| First | $2,000 | 20% | $360 |
| Second | $3,000 | 30% | $540 |
| Third | $5,000 | 50% | $900 |
The total income is $10,000. $2,000 divided by $10,000 is 20 percent, and 20 percent of $1,800 is $360. The three payments add to $1,800.
Which income number should you use?
Use one basis for everyone, and say which one it is. Gross means before tax and net means take-home pay. Monthly and yearly figures must also match, since a monthly number beside a yearly one gives a ratio that is badly off. The basis changes the answer. Suppose the same two people have take-home pay of $2,400 and $3,600 instead of $3,000 and $5,000 gross.
- Total take-home is $6,000.
- $2,400 divided by $6,000 is 40 percent, so the first person pays $720.
- $3,600 divided by $6,000 is 60 percent, so the second person pays $1,080.
That is $45 more for the first person and $45 less for the second than on the gross basis. Neither is the correct one. The group has to pick, and the pick should be written down. When pay varies, agree on one period for everyone, such as the average of the last 12 months.
What if the percent is not a whole number?
Type exact amounts instead of rounding. Say two people earn $2,500 and $4,000 and share a $1,000 bill. Their combined income is $6,500, so the first person’s share is $2,500 divided by $6,500, which is 38.46 percent, and the second person’s is 61.54 percent.
- First person: $1,000 times 2,500 divided by 6,500 is $384.62.
- Second person: $1,000 times 4,000 divided by 6,500 is $615.38.
The two amounts add to exactly $1,000.00. If you rounded to 38 and 62 percent instead, the split would be $380 and $620, which is $4.62 less for the first person and $4.62 more for the second. Exact amounts avoid that.
How do you set it up in EvenOut?
Add the expense, open the split chip and choose “Percent” if the percents are whole, or “Exact amounts” if you worked out dollar figures. In the three-person example, enter 20, 30 and 50 and each person’s dollar share appears under their name. For a monthly bill such as rent, set the expense to repeat monthly and the same payer and split carry over, so the income-based shares appear every month without retyping. When incomes change, use “Stop repeating” (expenses already added stay) and set up a new repeat with the new percents.
What to do next
Write down the incomes you are using, the basis and the date. Work out the percents, then check that the shares add to the bill. For rent in particular, see how to split rent based on income, and try your own numbers in the income-based split calculator. If percents are new to you, how to split by percentage explains the formula in detail, and splitting a bill unevenly covers cases where income is not the reason.
Frequently asked questions
Should you use gross or net income?
Either works if everyone uses the same one, and the choice changes the split. Gross is pay before tax and net is the amount that lands in the bank account. Pick the one every person can show, and write down which it is.
What if one person's income changes during the year?
Recalculate on the date the change happens and note that date next to the new incomes. Bills already split keep their old shares, and only new bills use the new percents.
Can I split only some bills by income?
Yes. You can split rent by income and groceries equally, for example. In EvenOut the split method is chosen per expense, so one group can hold both.
Is an income split fair?
That depends on the people paying, so this page only shows the arithmetic. Agree on the method before the first bill and write down the incomes used, so the numbers can be checked later.
Keep reading
- Calculator Income-based split calculator Enter a bill and each person's income to see each share in dollars and percent, and how far it sits from an equal split. Shares add up to the cent.
- Guide How to split a bill by percentage, with examples The formula for splitting a bill by percentage, with three worked splits of $1,250 (60/40, 50/30/20 and 33/33/34) and what to do when percents miss 100.
- Guide How to split a bill unevenly when orders differ Split a $186 dinner when one person's cocktails cost $24: carve out her drinks, split the rest four ways. Plus the right method for four uneven situations.
- Glossary Proportional split: meaning and formula A proportional split divides a cost by a weight such as income, nights present or room size. The formula and three worked examples, from $1,800 to $240.
- Guide The formulas for splitting bills, method by method Eight bill splitting formulas with variables, a worked example and a check for each: equal, percent, shares, exact, by item, income, balances and payments.