Average household income is the total amount of income earned by all members of a household over 15 whether they are related or not. This figure is added together and divided by the total number of people under that roof. Median household income, on the other hand, is the number that falls in the middle of all incomes. So if there are five people in the house who earn $15,000, $35,000, $54,000, $65,000, and $79,000, the median household income is $54,000.