Foreign Earned Income Exclusion Calculator

What the Foreign Earned Income Exclusion Calculator does

US citizens and residents living abroad can exclude foreign earned income up to an annual maximum if they meet the bona fide residence or physical presence test. The limit is prorated for the days you qualify in the year, and a separate housing exclusion covers housing costs above a base amount.

Formula

• Prorated maximum = annual maximum × qualifying days ÷ 365
• Housing base = 16% of the maximum (prorated)
• Housing exclusion = min(housing costs, limit) − base
• Earned income exclusion = min(income − housing exclusion, prorated maximum)

Worked example

Using the starting values in the calculator above:

How to read the result

Excluded income still counts when working out the tax rate on any remaining income (the stacking rule), so tax on the rest can be higher than expected.

In high-tax countries the foreign tax credit can be better than the exclusion; compare both with an adviser.

Estimates only, not tax advice. Rates and thresholds change; confirm current figures with your tax authority or adviser.

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