Gross monthly income is the total amount of money you earn in a single month before any taxes, Social Security, health insurance premiums, or retirement contributions are deducted. It is the "top-line" figure that lenders, landlords, and banks use to determine your creditworthiness and ability to pay rent or a mortgage.
Gross vs. Net Income: The Difference
While your gross income represents your full earnings, your net income (or "take-home pay") is what actually hits your bank account. Net income is calculated by taking your gross pay and subtracting mandatory taxes (Federal, State, and FICA) and voluntary deductions like 401(k) contributions.
Example Calculation (Hourly):
If you earn $25 per hour and work 40 hours a week:
1. Weekly Income: $25 × 40 = $1,000
2. Annual Income: $1,000 × 52 weeks = $52,000
3. Gross Monthly Income: $52,000 / 12 months = $4,333.33
Why You Need to Know This Figure
Rental Applications: Most landlords require your gross monthly income to be at least 3x the monthly rent.
Debt-to-Income (DTI) Ratio: Mortgage lenders use gross income to see if you can handle a new loan payment.
Budgeting: Understanding your baseline earnings helps you plan for fixed expenses.
Common Pay Period Formulas
Bi-weekly: Multiply your bi-weekly paycheck by 26 and divide by 12.
Semi-monthly: Simply multiply your semi-monthly paycheck by 2.
Weekly: Multiply your weekly paycheck by 52 and divide by 12.
function toggleHourlyFields() {
var freq = document.getElementById('payFrequency').value;
var hourlyDiv = document.getElementById('hourlyDetails');
var amountLabel = document.getElementById('amountLabel');
var amountInput = document.getElementById('payAmount');
if (freq === 'hourly') {
hourlyDiv.style.display = 'block';
amountLabel.innerText = 'Hourly Pay Rate ($)';
amountInput.placeholder = 'e.g. 25';
} else if (freq === 'annually') {
hourlyDiv.style.display = 'none';
amountLabel.innerText = 'Annual Pre-tax Salary ($)';
amountInput.placeholder = 'e.g. 60000';
} else if (freq === 'weekly') {
hourlyDiv.style.display = 'none';
amountLabel.innerText = 'Weekly Pay Amount ($)';
amountInput.placeholder = 'e.g. 1000';
} else if (freq === 'biweekly') {
hourlyDiv.style.display = 'none';
amountLabel.innerText = 'Bi-weekly Pay Amount ($)';
amountInput.placeholder = 'e.g. 2000';
} else if (freq === 'semimonthly') {
hourlyDiv.style.display = 'none';
amountLabel.innerText = 'Semi-monthly Pay Amount ($)';
amountInput.placeholder = 'e.g. 2500';
}
}
function calculateGMI() {
var freq = document.getElementById('payFrequency').value;
var amount = parseFloat(document.getElementById('payAmount').value);
var hours = parseFloat(document.getElementById('hoursPerWeek').value);
var monthlyTotal = 0;
var annualTotal = 0;
if (isNaN(amount) || amount <= 0) {
alert("Please enter a valid pay amount.");
return;
}
if (freq === 'annually') {
annualTotal = amount;
monthlyTotal = amount / 12;
} else if (freq === 'hourly') {
if (isNaN(hours) || hours <= 0) {
alert("Please enter valid hours per week.");
return;
}
annualTotal = amount * hours * 52;
monthlyTotal = annualTotal / 12;
} else if (freq === 'weekly') {
annualTotal = amount * 52;
monthlyTotal = annualTotal / 12;
} else if (freq === 'biweekly') {
annualTotal = amount * 26;
monthlyTotal = annualTotal / 12;
} else if (freq === 'semimonthly') {
annualTotal = amount * 24;
monthlyTotal = amount * 2;
}
var resultDiv = document.getElementById('gmiResult');
var valueDiv = document.getElementById('gmiValue');
var breakdownDiv = document.getElementById('gmiBreakdown');
resultDiv.style.display = 'block';
valueDiv.innerText = '$' + monthlyTotal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
breakdownDiv.innerText = "This equates to an estimated annual gross income of $" + annualTotal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultDiv.scrollIntoView({behavior: 'smooth', block: 'nearest'});
}