By Ben Molin • May 5th 2026

Analyzing the SNAP Phase Out Rate

In benefits policy people often talk about a phase out rate, or, for every additional $1 in income a household gets, how much do they lose in related benefits? For SNAP, benefit amounts are based on net income, which is gross income minus some fixed and variable deduction amounts for specific expense categories. While there are minimum and maximum SNAP benefit amounts, in general $100 more in net income = $30 less in benefits as the exact formula is:

Benefit Amount = Maximum Benefit Amount - (30% x Net Income)

The reason for writing this article is that does not mean SNAP is always or even usually a 30% phase out, and is closer to a 24% - 45% phase out rate depending on the situation.

The first reason for this is that there is a 20% earned income deduction when calculating net income. So for every additional $100 in earned income, the earned income deduction goes up by $20, meaning, there is only an effective $80 increase in net income. Going back to the formula, this means that the $80 increase in net income would result in $80 * 30% = $24 less in benefits. In other words, the formula is:

Benefit Amount = Maximum Benefit Amount - (30% x (Earned Income + Non-Job Income - 20% Earned Income - All Other Deductions Besides Earned Income Deduction)

or simplified

Benefit Amount = Maximum Benefit Amount - (30% x (80% x Earned Income + Non-Job Income - All Other Deductions Besides Earned Income Deduction))

So far, the phase out rate for SNAP is 24% for Earned Income and 30% for Non-Job (Unearned) Income.

Excess Shelter Deduction Complexity

There is one additional nuance to SNAP benefit phase out rates, which is the excess shelter deduction. Excess shelter costs - or shelter costs that exceed half of "adjusted income" (total income minus a few deductions including the earned income deduction) - can be deducted.

This is another point where income is going to affect deduction amounts, as more income means less of the shelter costs will be in "excess." When this applies, this could be a phase out rate of 36% for Earned Income or 45% for Non-Job Income, (1.5x the numbers above, which makes sense as it's half of adjusted income). This will depend on whether the household has any shelter expenses, or whether they are already at the maximum excess shelter deduction.

Another way to think about it is that for every dollar Non-Job Income goes up, that's $0.50 less in shelter expenses that can be deducted, or $0.40 less for Earned Income, which then is multiplied out by 30% for the effect on benefit rate (15% and 12%).

Overall Phase Out Rates

Earned Income: 24% - 36%
Non-Job Income: 30% - 45%