CALCULATING

NET MONTHLY INCOME

STEPS TO CALCULATING NET MONTHLY INCOME

Step 1: Pay Rate X Hours Worked = Gross Weekly Income

Step 2: Gross Weekly Income X Number of Weeks Paid = Gross Yearly Income

Step 3: Gross Yearly Income / 12 (Months in a Year) = Gross Monthly Income

Step 4: Sum up all Percentage of Deductions = Total Percentage of Deductions

Step 5: Gross Monthly Income X Total Percentage of Deductions = Monetary Deductions

Step 6: Gross Monthly Income --- Monetary Deductions = Net Monthly Income

BILLY BOB EARNS $9.00 PER HOUR. BILLY BOB WORKS 40 HOURS PER WEEKBILLY BOB IS PAID FOR 50 WEEKS PER YEAR (2 WEEKS OFF)

Step 1:

Pay Rate X Hours Worked = Gross Weekly Income

BILLY BOB EARNS $9.00 PER HOUR. BILLY BOB WORKS 40 HOURS PER WEEKBILLY IS PAID FOR 50 WEEKS PER YEAR

Step 2:

Gross Weekly Income X Number of Weeks Paid = Gross Yearly Income

BILLY EARNS $9.00 PER HOUR. BILLY WORKS 40 HOURS PER WEEKBILLY IS PAID FOR 50 WEEKS PER YEAR

Step 3:

Gross Yearly Income / 12 (Months in a Year) = Gross Monthly Income

BILLY’S DEDUCTIONS ARE: FEDERAL TAX– 7% STATE TAX– 3% LOCAL TAX– 1% SOCIAL SECURITY– 7%

Step 4

Fed Tax + State Tax + Local Tax + Soc Sec = Total Percentage of Deductions

Step 5:

Gross Monthly Income X Total Percentage of Deductions = Monetary Deduction

Step 6:

Gross Monthly Income – Monetary Deductions = Net Monthly Income

STEPS TO CALCULATING NET INCOME

Step 1: $9.00 X 40 = $360 is Net Weekly Income

Step 2: $360 X 50 = $1800 is Net Yearly Income

Step 3: $18,000 / 12 = $1,500 is Net Monthly Income

Step 4: 7% + 3% + 1% + 7% = 18% is Total Percentage of Deductions

Step 5: $1,500 X .18 = $270 is the Monetary Deductions

Step 6: $1,500 – 270 = $1,230 is Net Monthly Income