Before going in to interview for a new position, calculate your salary requirements. Securing your required salary ensures that you will have enough income to cover your everyday living expenses plus income taxes. When calculating your figures, use exact numbers. Refer to bills and receipts from the previous year if you are unsure about the cost of an expenditure.
Things You'll Need
Create a list of required annual expenditures. Examples include rent or mortgage payments; home, auto and life insurance; electricity, water and gas utility bills; food; clothing; home maintenance; and education loan repayments.
Calculate expenditure costs. Split certain expenditures into periods. For example, home, auto and life insurance premiums are typically paid in installments. Identify the number of periods and the periodic amount for such expenditures. Total the amount owed for the year. Repeat for every expenditure.
Then add all your expenditures to arrive at your total costs.
Add income taxes using a payroll withholding tax calculator (see Resources).
Add your expected tax bill to the total cost of your required expenditures. For example, if your tax bill is X dollars and the cost of your required expenditures is Y dollars, add X and Y to cover the cost of both.
Request your break-even salary—the number that covers required expenditures plus income taxes—or continue your calculations to determine how much salary you require to cover lifestyle expenditures.
Figure the cost of lifestyle expenditures, such as vacation, entertainment and dining out. Calculate the tax owed on the final total using last year’s effective tax rate.
Combine the total cost of lifestyle expenditures with the total cost of required expenditures plus income taxes.
Request your preferred salary, which covers your required and lifestyle expenditures plus income taxes.