Work out passive income target instantly with clear inputs, formula shown and shareable results.
Passive income capital is the gross income needed divided by the portfolio yield, and the gross figure must be grossed up for tax. At a 6% yield and 20% tax, every unit of net monthly income needs about 250 units of capital.
Passive income capital
Capital = target income × 12 / (1 - tax rate) / portfolio yield
Figures are estimates for planning only. Prices, returns, inflation and personal circumstances all change. This is not financial or tax advice — speak to a qualified adviser before making decisions.
Because a sustainable yield is a small percentage. Chasing a higher yield to reduce it usually adds capital risk.
Only if you plan to sell assets. Living on yield alone preserves the capital and its future income.