How to Calculate Your Debt-to-Income Ratio
Your debt-to-income ratio is your total monthly debt repayments divided by your net monthly income, expressed as a percentage. For example, if you pay R6,000 toward debt on a net income of R20,000, your ratio is 30%. A lower ratio is healthier; a ratio above roughly 35–40% may signal over-indebtedness and warrants a financial assessment.
Key Points
- Divide total monthly debt by net monthly income.
- Express the result as a percentage.
- Below 35% is generally healthy.
- Above 40% may signal over-indebtedness.
The calculation step by step
First, add up all your monthly debt repayments: home loan, vehicle finance, personal loans, credit cards, store cards and overdrafts. Then divide that total by your net monthly income (after deductions). Multiply by 100 to get the percentage.
For example, R6,000 in debt on R20,000 net income gives (6,000 ÷ 20,000) × 100 = 30%.
What the numbers mean
A ratio below 35% is generally considered manageable. Between 35% and 40% suggests strain. Above 40% — and especially above 50% — strongly suggests over-indebtedness, where a financial assessment is advisable.
These are guidelines, not absolute rules. The real test is whether you can meet essentials and debt comfortably and still save.
What to do with the result
If your ratio is healthy, keep monitoring it and avoid taking on unnecessary new debt. If it is high, look for ways to reduce spending and, if necessary, seek a financial assessment to determine whether debt review is appropriate.
Calculating the ratio is a quick way to take the temperature of your finances.
Frequently Asked Questions
Worried That Your Debt Has Become Unaffordable?
Debt Guidance can assess your income, essential expenses and debt commitments to determine whether debt review may be appropriate.
Reviewed by Carolina Guevara Harris
Registered Debt Counsellor · NCRDC3152
Last updated: 17 September 2025
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