Savings rate

Savings rate is simply the amount you save each month expressed as a percentage.

So if you spend 30k in a month on a post-tax income of 60k per month and send an additional 10k back home to your parents and invest the other 20k, then your savings rate is 20k/60k = 33%. Simple enough, right?

A point to note when deciding what your income is to remember to add additional sources of investments/income like EPF/VPF/Stocks, RSUSs, ESOPs. If you contribute 2k to your EPF each month, then that should be considered as income. For other components that are not monthly - like annual bonuses or stock grants - you should take the expected annual post-tax values and divide them by 12 to arrive at a monthly figure. Similarly, one-time or annual expenses like insurance premiums, annual subscriptions, medical bills, house-maintenance etc should also be added to the monthly expenses after dividing by the appropriate numbers. Note that you don't have to settle on a monthly number - if it's easier you may calculate these numbers on an annual basis.

Income is income, even if you don't see that money in your bank account each month. So are the expenses.

Also note that just stashing your savings in a savings bank account is not enough - you have to invest it. This is so that inflation doesn't eat at the value of your money that's lying in the bank account - most bank accounts are woefully inadequate when protecting you against inflation.

What's a sustainable savings rate?

A sustainable savings rate is one that can be sustained for longer durations - month after month, year after year. Many of us can save a lot more than usual in a single, isolated month if we really put our minds to it - but will find it difficult to do that consistently. For example if you stop sending money home, or going out for a month, then your savings rate is bound to improve for that month. But you cannot (or may not) want to keep that up forever.

Unless it's a lifestyle acceptable to you, that temporary savings rate is not accurate. A savings rate is meaningful only as long as you can maintain it. Often this is put more eloquently as

Build the life of your dreams and then save for it

Meaning - live your life the way you wish to (sustainably and not like there is no tomorrow, of course) and then save and invest to FI such that you can maintain that standard of life.