The 30% rule, in one line
Spend no more than about 30% of your monthly take-home pay on rent. On ₹60,000 in hand, that's around ₹18,000. It isn't a law of nature — it's a rule of thumb that leaves enough for food, travel, bills and, crucially, savings. Below 25% feels comfortable. Above 40% usually means saving almost nothing.
Always use take-home pay (after tax and PF), and subtract fixed EMIs first. A ₹15,000 car loan EMI is money you can't spend on rent.
Rent affordability calculator
Based on take-home pay after EMIs. Add maintenance and deposit separately.
The costs that aren't in the rent
The monthly rent is only the headline. Before you sign, add up what moving in actually costs:
- --Security deposit — anywhere from two months to many months of rent depending on the city. The Model Tenancy Act suggests capping residential deposits at two months, but only where a state has adopted it, so ask early.
- --Brokerage — often around a month's rent when you use a broker.
- --Maintenance or society charges — sometimes included, often not. Get it in writing.
- --Utilities — electricity, water, gas, internet. Ask the current tenant what bills usually come to.
- --Setting up — furniture, appliances, a fridge, curtains, the first grocery run. Budget a one-off amount.
- --Annual increase — many agreements add 5–10% a year. Check the clause before you commit for two years.
How sharing a flat changes the maths
Sharing is the fastest way to bring rent under 30% — but only if the split is fair and the bills don't become a monthly argument. Bigger rooms, attached bathrooms and balconies are worth different amounts; our guide to splitting rent with unequal rooms has a formula. If incomes differ a lot, see splitting rent fairly when roommates earn different amounts.
Decide on day one how shared bills — electricity, Wi-Fi, groceries, the cook — will be split and logged. That's what keeps a cheap flat cheap.
When it's fine to go above 30%
- --It cuts another big cost. Living near work can save more on cabs and time than the extra rent costs.
- --It's short-term. A higher rent for six months while you find something better is a different decision from a two-year lease.
- --Your savings are already automatic. If you move savings out on payday and still cover everything else, the percentage matters less.
Track a full month of spending in the new flat before deciding it works. The number that matters isn't the rent — it's what's left after everything.
Frequently asked questions
How much rent can I afford on my salary?
A common guideline is up to 30% of your monthly take-home pay after EMIs. On ₹50,000 in hand that is about ₹15,000; on ₹1,00,000 it is about ₹30,000. Around 25% is comfortable and leaves room to save; 40% or more usually leaves very little.
Should I use gross salary or take-home pay for the 30% rule?
Use take-home pay — what lands in your account after tax and provident fund — and subtract fixed EMIs first. Gross salary overstates what you can actually spend.
What costs should I budget for besides rent?
Security deposit, brokerage, maintenance or society charges, utilities (electricity, water, gas, internet), setting-up costs like furniture and appliances, and the yearly rent increase in your agreement.
Is it better to share a flat to save on rent?
Sharing usually brings rent well under 30% of income, as long as rent is split fairly by room and shared bills are agreed and tracked from the first month.
How Snugtab helps
See what's left after rent
Related: roommate expense tracker · the 50/30/20 rule.