Research suggests that coming from a lower economic background compromises social integration at school, yet the precise mechanisms underlying this link remain unknown. Therefore, this study examined the effect of household income on friendship network dynamics among classmates in a large sample of Swedish youths (n = 4787 from 235 classes, m age = 14.65, 51% girls, and 33% immigrant background), using multilevel longitudinal social network analysis. Over time, students from poorer households were less often selected as a friend by classmates and they less often initiated or maintained friendship ties than students from higher income households. Furthermore, different conceptualizations of income relative to classmates did not impact friendship formation tendencies. The findings indicate that theories of relative income do not extend understanding of students’ friendship formation beyond processes related to absolute income. In addition, this study suggests that the social integration of students from low-income households could be boosted by both promoting their agency in forming friendships and preventing exclusion by classmates.