Disposable personal income is the amount which is left with the households after paying personal taxes such as income tax, property tax, national insurance contributions etc. Formula For Disposable Personal Income:

Disposable personal income = Personal Income Personal Taxes

DPI = PI- Personal Taxes

The concept of disposable personal income is very important for studying the consumption and saving behaviour of the individuals. It is the amount which households can spend and save.

Disposable Income = Consumption + Savings = C + S