Deductions and net income
Your SNAP benefit is not based on your gross pay. It is based on your net income — your gross income minus a series of deductions the program allows. Deductions are the reason many households with incomes above the net limit on paper still qualify, and the reason two households with the same pay can receive different benefits. The deductions are applied in a fixed order, and each one matters.
- 20% of earned income is deducted first — work always leaves you better off under SNAP than the same amount of unearned income.
- Standard deduction (FY2026): $209 for households of 1–3, $223 for 4, $261 for 5, $299 for 6 or more.
- Excess shelter deduction: shelter costs above half of your income after the other deductions, capped at $744 (FY2026) — no cap if the household has an elderly or disabled member.
- Medical deduction: for elderly or disabled members, medical expenses above $35 per month are deductible.
- Dependent-care deduction: actual out-of-pocket child or dependent-care costs needed for work, training, or education.
The deductions, in order
- 20% earned-income deduction. One-fifth of any earnings is disregarded. Earn $1,000 and only $800 counts at this step.
- Standard deduction. A flat amount by household size: $209 (1–3 people), $223 (4), $261 (5), $299 (6+).
- Dependent-care deduction. What you actually pay for care of a child or incapacitated adult so a household member can work, look for work, or attend training or education.
- Medical deduction. For households with an elderly (60+) or disabled member: allowable medical expenses above $35 per month.
- Excess shelter deduction. Rent or mortgage plus utilities, minus half of your income after the deductions above — capped at $744 per month (FY2026), with no cap for households with an elderly or disabled member. The homeless shelter deduction is $198.99 (FY2026).
The result is your net income. It must be at or below the net income limit for your household size (see income limits), and it is the figure the 30% benefit formula uses.
Worked example, labelled as calculated
A household of three: one earner with $2,400 gross monthly earnings, rent of $900, no other income. Step 1: 20% of $2,400 = $480 deducted, leaving $1,920. Step 2: standard deduction $209, leaving $1,711. Steps 3–4: none. Step 5: half of $1,711 is $855.50; shelter costs of $900 exceed that by $44.50, so the excess shelter deduction is $44.50 (well under the $744 cap). Net income = $1,711 − $44.50 = $1,666.50. The household passes the net test ($1,666.50 is below $2,221 for three people) and its benefit is $785 − 30% of $1,666.50 = $785 − $500 (rounded) = about $285 per month. Your state agency rounds the 30% figure under its own rule, so the exact dollar may differ by a dollar or two.
What does not reduce your benefit
A common worry is that earning more always means losing SNAP dollar for dollar. It does not: because only 30% of net income reduces the benefit, and because 20% of earnings is disregarded first, each extra $100 of earnings reduces the benefit by at most about $24 after the deductions — you are always better off earning. Similarly, claiming deductions you are entitled to (especially dependent care and, for older or disabled members, medical costs) directly raises your benefit, so keep receipts and report these costs at application and recertification.
Sources to check: USDA Food and Nutrition Service, SNAP Cost-of-Living Adjustment information, fiscal year 2026; 7 CFR 273.9(d) (deductions); CRS, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits.