Say a household earns $90,000 a year, which is $7,500 a month before tax. At a 30% housing share the budget is $2,250 for rent and utilities. Take off $120 for utilities and internet and the rent to look for is $2,130. Enter your own income. See your range.
The 30% guide
Many landlords and housing agencies treat 30% of gross income as the limit for housing, though it’s only a guide and no law backs it up. Spend more and there’s less left for food, transit and savings. Spend less. Other goals get room.
What counts in the housing budget
Rent, utilities and internet all sit inside the share you choose. Some landlords look at rent only at 30%, others count every housing cost. Switch the share to 25%, 35% or 40% to compare each view.
Gross versus take-home income
The rule uses income before tax. Take-home pay is lower, so 30% of gross can be nearer 40% of the money you actually receive. The take-home pay calculator shows what lands in your account.
Debt payments
Car loans, credit cards and student loans take a share too. Once they pass 20% of gross income, the calculator shows a warning. Landlords may check credit and income letters, so plan for that before you apply.
What Ontario landlords ask for
In Toronto and across Ontario, a landlord can ask for a credit report, references and proof of income. A damage deposit is not allowed. Only the last month’s rent can be collected as a deposit, and nothing else. In a tight market, a stronger application helps a lot.
Reading the table
The table lists the housing budget and rent at each share from 25% to 40%. A few points make a real difference. Go through your other bills afterwards, one by one, and work out where the money would come from if rent took the higher share.
At $7,500 a month the four rows are $1,875 at 25%, $2,250 at 30%, $2,625 at 35% and $3,000 at 40%. Each five point step adds $375 a month, or $4,500 a year. That is why a small change in the share matters more than it looks. Those rows show the housing budget before utilities are taken off. Pick the row you can carry when other bills rise.
A lower income example
A household with $60,000 of income earns $5,000 a month before tax. At 30% the housing budget is $1,500, and after $100 for utilities the rent to look for is $1,400. Toronto rents often run higher, so a roommate or a smaller unit may be needed.
Ways to stretch the budget
Areas farther from the core can have lower rents with transit still running. A roommate can cut costs in half, and a unit with heat and water included lowers utility bills. Sharing works best when everyone adds income to the calculation, splits rent fairly and signs the lease. For a longer lease, ask about incentives. Landlords often want an employer letter, recent pay stubs and a credit report, so have them ready before viewings. A guarantor may help if income is low.
Where to go next
Rents rise. Check the yearly increase in the Ontario rent increase calculator. Compare owning with the rent vs buy calculator. Plan other spending in the monthly budget calculator, and check local costs in the Toronto cost of living calculator.
Frequently asked questions
How much of my income should go to rent?
A common guide is 30% of gross income.
Does the 30% include utilities?
In this calculator, yes. Utilities are taken out of the housing budget.
Is the 30% rule a law?
No. It is a guide.
What if my debts are high?
Above 20% of gross income, landlords may see the application as a stretch.
Can I ask for a damage deposit in Ontario?
Landlords can only ask for a rent deposit for the last month.
Should roommates combine income?
Yes, add all incomes together for the household.
Sources and updates
Last reviewed: . Full disclaimer. How we build calculators. Editorial policy.
Estimate only. This calculator gives general information for planning. It is not tax, legal or financial advice, and it is not affiliated with the City of Toronto, MPAC or the Canada Revenue Agency. Results depend on the numbers you enter and may differ from official amounts. Check official sources or a qualified professional before you decide.