Which type of income is left after taxes and can be spent or saved?

This is called disposable income. It is the money that people receive from salaries or earnings after deducting taxes. This is important because it shows how much a person can use to buy their needs or wants—or save for future needs. For instance, if a high school teacher earns ₱25,000 a month but pays ₱2,000 in taxes, their disposable income is ₱23,000. With this money, the teacher might pay rent, buy groceries, or even save some portion in a bank. In the Philippine setting, a rise in disposable income usually results in increased spending in local sari-sari stores, malls, and food chains, which helps boost the economy.

Answered by Sefton | 2025-05-22