Understanding your monthly salary can be a good starting point for creating a savings or investment plan, drafting a household budget or planning for large expenses. Whether you know your annual salary or your hourly wage, calculating your monthly income figure is a simple process requiring only a few quick calculations.
Things You'll Need
- Final pay stub from previous year
- W-2 tax form
- Spreadsheet program or pencil, paper and calculator
Using Annual Salary
Enter your annual base salary into a spreadsheet program, or write it on a piece of paper and use a calculator. Perform all of the following calculations directly under this number.
Add all additional income, including annual bonuses, performance-based incentive pay and other items, to your annual salary figure. If you are uncertain about the extra amounts that you will receive this year, use the bonus payment amounts that you received in the previous year. This figure will be your annual base income before normal deductions.
Subtract all automatic deductions for items such as medical insurance, taxes and any garnishments. Use your last pay stub from the previous year to get an idea of the total annual taxes that you pay, and consult your company's human resources representative for information related to annual deductions for insurance costs and other items. This figure will be your annual take-home pay.
Divide the annual figure by 12 to get your monthly salary. Dividing the base pay, found in Step 2, by 12 will give you your monthly base salary. Dividing the take-home pay, found in Step 3, by 12 will give your monthly take-home pay.
Using Hourly Wage
Calculate the average number of hours you work each week. If you work the same number of hours each week, proceed to Step 2. If you work variable hours, add the number of hours that you have worked for as many weeks as you can remember, up to 12 weeks, and divide the sum by the number of weeks used in the calculation.
Multiply your average weekly hours by your hourly wage. Round the number of hours up or down to arrive at a whole number. Rounding up will give you a more liberal estimate, while rounding down will give a more conservative estimate. The result will be your weekly base pay.
Subtract any weekly deductions for insurance, taxes or garnishments. Check your recent pay stub, or speak with a manager to find out how much is deducted each week. This figure shows your weekly take-home pay.
Multiply the weekly figure by 52 to get your annual income, then divide that number by 12 to get your monthly income. Using the base pay figures, found in Step 2, will give you your monthly base pay. Using the take-home figure, found in Step 3, will give your monthly take-home pay.
Adjust your monthly income figure for any yearly bonuses or other financial incentives you expect to receive. Consider any year-end or holiday bonuses that you received the previous year or expect to receive in the current year. Divide the total annual incentive amount to be received by 12, and add the quotient to your monthly income figure to get your adjusted monthly salary.
Tips & Warnings
- Much of the information needed for these calculations can be obtained from your W-2, the tax form sent to you by your employer each year (see References).
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