Debt simplification calculator: the fewest payments for four people
Quick answer
Enter up to six IOUs among four people, A to D. The calculator finds each person's net balance, settles any pair of exact opposites with one payment, then has the biggest debtor pay the biggest creditor until everyone is at zero. For four people that is the fewest payments possible. The example turns six IOUs worth $175 into 2 payments worth $95.
Key points
- A person's net is the IOUs owed to them minus the IOUs they owe. The four nets always add up to zero.
- Four people never need more than 3 payments, and at most 2 when one debtor owes exactly what a creditor is owed.
- In the example, six IOUs worth $175 become 2 payments worth $95: A pays B $45 and C pays D $50.
- For up to four people this rule cannot be beaten. Larger groups can hide subgroups that settle among themselves.
- Only each person's net is fixed. An app can show a different set of payments that clears the same nets.
On this page
Payments needed after simplifying 2
IOUs entered 6
Money changing hands without simplifying $175.00
Money changing hands after simplifying $95.00
A owes $45.00
B is owed $45.00
C owes $50.00
D is owed $50.00
A pays B $45.00
C pays D $50.00
Payment 3 (not needed) $0.00
Show the formula
- Net for each person = the IOU amounts owed to them minus the IOU amounts they owe. The four nets add up to 0
- If one person owes exactly what another person is owed, that pair settles with one payment
- Then the person with the most negative net pays the person with the most positive net the smaller of the two amounts, and this repeats until every net is 0
- Payments after = the payments this makes, never more than 3 for four people. Payments before = the IOUs you entered with an amount above 0
When to use the debt simplification calculator
Use it when a few people owe each other in several directions and you want the fewest payments that clear everything. Enter up to six IOUs among four people, called A, B, C and D. Each IOU has who owes it (1 for A, 2 for B, 3 for C, 4 for D), who is owed (the same numbers) and an amount. An amount of 0 means the IOU is ignored.
As of October 2026, Splitwise describes its Simplify Debts setting as one that “restructures who owes whom within a group to minimize the total number of payments needed for everyone to settle up”. This simplify debts calculator has the same aim for IOUs you type in by hand, and it does not read a group in any app. If you are starting from receipts and who paid for what, the who owes who calculator does that first step.
How does the calculator find the fewest payments?
Three steps, all in whole cents:
- Net balance for each person. Add up the IOUs owed to them and subtract the IOUs they owe. Positive means they are owed money, negative means they owe it, and the four nets add up to 0.
- Cancel exact pairs. If one person’s net debt is exactly what another person is owed, those two settle with a single payment and drop out.
- Match biggest to biggest. The person who owes the most pays the person who is owed the most, using the smaller of the two amounts. Repeat until every net is 0.
Worked example: six IOUs among four people
The calculator opens with six IOUs that add up to $175:
- A owes B $20
- D owes B $40
- C owes D $55
- B owes C $15
- C owes A $10
- A owes D $35
Paying each one on its own takes 6 payments. Adding up each person’s side gives the nets:
| Person | Owes in total | Is owed in total | Net balance |
|---|---|---|---|
| A | $55 | $10 | Owes $45 |
| B | $15 | $60 | Is owed $45 |
| C | $65 | $15 | Owes $50 |
| D | $40 | $90 | Is owed $50 |
A owes exactly what B is owed, and C owes exactly what D is owed, so two pairs cancel. A pays B $45 and C pays D $50. That is 2 payments worth $95 instead of 6 worth $175.
What happens when no pair cancels?
Say the nets are A owes $50, B owes $30, C is owed $45 and D is owed $35. No debt matches any credit, so the biggest debtor goes first. A pays C $45, B pays D $30, and A pays D the last $5. That is 3 payments, the most four people ever need. To try it, enter A owes C $45, A owes D $5 and B owes D $30, and set the other three amounts to 0.
A different set of 3 payments reaches the same result: A pays D $35 and C $15, and B pays C $30. An app can therefore show different payments than this page does. Each person’s net cannot differ.
Why does the calculator stop at four people?
The fewest payments for a group is the number of people with a nonzero net, minus the most separate subgroups you can form that each add up to zero on their own. Four people with nonzero nets can only divide into two pairs, which need 2 payments, or stay one group, which needs 3. Two pairs happen exactly when one debtor owes what a creditor is owed, which is the exact pair step, so nothing can beat the rule. With more people, subgroups of three or more can settle among themselves, and finding them takes a search this calculator does not do.
Common mistakes
- Putting the same person on both sides. An IOU from A to A is not a debt. The calculator warns and shows no result until you change a number.
- Entering an IOU that was partly paid. Enter only what is still owed. If A owes B $20 and has paid $10, enter $10.
How this works in EvenOut
In an EvenOut group the same idea is a setting. “Simplify debts” sits under “Settling up” in group settings, tagged “Recommended”, and it is on by default: “Fewer payments, same totals.” The “Balances” block lists your balance with each person rather than the whole group’s, so the calculator is where you see all four nets side by side.
The reasoning behind each step is in how simplify debts works. The minimum number of payments to settle debts covers how low the count can go, and apps that simplify debts lists which apps offer it.
Frequently asked questions
Is this the fewest payments in every case?
For up to four people, yes, because the only way to do better than one group is two separate pairs, and the exact pair step already finds those. With six people it can miss. Nets of +$30, +$10, +$10, minus $15, minus $15 and minus $20 settle in 4 payments as two groups of three, and this rule makes 5.
What if two people owe each other?
Enter both IOUs. If A owes B $30 and B owes A $20, A's net is minus $10 and B's is plus $10, so the two IOUs become one payment of $10 from A to B. The amounts that run in opposite directions net out before any payment is chosen.
Can I use it for more than four people?
Not this one, which has four slots. The who owes who calculator takes up to six people and starts from what each person paid. An EvenOut group holds up to 200 people, and its Simplify debts setting works across the whole group.
Can I enter IOUs in different currencies?
Keep every IOU in one currency, because the calculator adds amounts without converting. As of October 2026, Splitwise says Simplify Debts "works within each currency separately" and does not convert. EvenOut does not convert currencies either, and it keeps simplify debts per currency.
Will the payments match what my app shows?
Not always, because more than one set of payments can clear the same nets. As of October 2026, Splitwise says it re-runs the arrangement whenever an expense or payment is added, so the payments it shows can change as the group adds entries while no one's total balance does.
Sources
Checked October 6, 2026.
- Splitwise: What is Simplify Debts?
Keep reading
- Guide How simplify debts works, with worked examples Simplify debts cuts the payments a group needs without changing anyone's total. Six IOUs worth $105 become 3 payments worth $50, with the arithmetic shown.
- Guide Minimum transactions to settle debts: the algorithm Settling N people takes at most N minus 1 payments, but not always the fewest. A five-person example needs 4 payments greedily and only 3 at best.
- Calculator Who owes who calculator Enter what each person paid to see every balance and the short list of payments that settles the group. Odd cents are shared out so it adds up.
- Comparison Apps that simplify debts: who does it and can you turn it off Ten apps compared on fewest-payments settling: which simplify debts, which let you switch it off, and a worked example. Facts as of October 2026.