Monthly Income Calculator
Calculate your take-home pay based on annual salary or hourly wages.
Annual Salary
Hourly Wage
Gross Monthly Income:
Estimated Tax Withholding:
Other Deductions:
Net Monthly Take-Home:
How Do You Calculate Your Monthly Income?
Understanding your monthly income is the foundation of any successful personal finance plan. Whether you are paid by the hour or earn a fixed annual salary, the calculation requires distinguishing between "Gross Income" and "Net Income."
Gross Income: The total amount you earn before taxes and deductions.
Net Income: Your actual take-home pay after all obligations are subtracted.
Net Income: Your actual take-home pay after all obligations are subtracted.
The Formula for Annual Salary Earners
If you receive a fixed annual salary, the calculation is straightforward. You divide your total yearly pay by 12 months.
Formula: (Annual Salary / 12) = Gross Monthly Income
To find your net monthly income, you must then subtract federal and state taxes, Social Security contributions, health insurance premiums, and retirement contributions (like a 401k).
The Formula for Hourly Workers
For those paid hourly, the calculation requires an extra step to account for the number of hours worked in a year.
- Multiply your hourly rate by your weekly hours (e.g., $25 x 40 hours = $1,000 per week).
- Multiply your weekly pay by the number of weeks worked per year (usually 52).
- Divide that annual total by 12.
Formula: (Hourly Rate × Hours per Week × 52) / 12 = Gross Monthly Income
Real-World Example
Suppose you earn $30 per hour and work 40 hours per week. You have a 15% tax rate and pay $200 per month in health insurance.
- Gross Weekly: $30 × 40 = $1,200
- Gross Annual: $1,200 × 52 = $62,400
- Gross Monthly: $62,400 / 12 = $5,200
- Tax Deduction: $5,200 × 0.15 = $780
- Net Monthly Income: $5,200 – $780 – $200 = $4,220
Common Monthly Deductions to Consider
When calculating your monthly budget, don't forget to account for these common "invisible" costs that lower your take-home pay:
- FICA Taxes: Social Security and Medicare.
- Health Insurance: Premiums deducted directly from your paycheck.
- Retirement Contributions: 401(k) or 403(b) allocations.
- Wage Garnishments: Student loans or child support payments.
- HSA/FSA: Health savings account contributions.