What is the difference between Discretionary and Disposable Income?

Disposable income and discretionary income are closely related. In fact, discretionary income is a derivative of disposable income.

In Environics Analytics' Canadian data products, disposable income is defined as household income less income taxes and all sub-elements of income-related non-negotiable levies and fees including CPP/QPP, employment insurance, provincial health levies, and other mandatory payroll deductions.

Discretionary income is defined as disposable income less expenditure on food (total expenditure on food less food purchased from restaurants) and expenditure on shelter (rent, utilities, property taxes, property insurance, maintenance, mortgage payments, and other related expenses with respect to primary residence only).

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