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What is gross income? Business gross income & individual gross income

How to Calculate Gross Monthly Income

Salary Calculator

The Salary Calculator converts salary amounts to their corresponding values based on payment frequency. Examples of payment frequencies include biweekly, semi-monthly, or monthly payments. Results include unadjusted figures and adjusted figures that account for vacation days and holidays per year.

This salary calculator assumes the hourly and daily salary inputs to be unadjusted values. All other pay frequency inputs are assumed to be holidays and vacation days adjusted values. This calculator also assumes 52 working weeks or 260 weekdays per year in its calculations. The unadjusted results ignore the holidays and paid vacation days.

A salary or wage is the payment from an employer to a worker for the time and works contributed. To protect workers, many countries enforce minimum wages set by either central or local governments. Also, unions may be formed in order to set standards in certain companies or industries.

Salary

A salary is normally paid on a regular basis, and the amount normally does not fluctuate based on the quality or quantity of work performed. An employee’s salary is commonly defined as an annual figure in an employment contract that is signed upon hiring. Salary can sometimes be accompanied by additional compensation such as goods or services.

There are several technical differences between the terms “wage” and “salary.” For starters, while the word “salary” is best associated with employee compensation on an annual basis, the word “wage” is best associated with employee compensation based on the number of hours worked multiplied by an hourly rate of pay. Also, wage-earners tend to be non-exempt, which means they are subject to overtime wage regulations set by the government to protect workers. In the U.S., these regulations are part of the Fair Labor Standards Act (FLSA). Non-exempt employees often receive 1.5 times their pay for any hours they work after surpassing 40 hours a week, also known as overtime pay, and sometimes double (and less commonly triple) their pay if they work on holidays. Salaried employees generally do not receive such benefits; if they work over 40 hours a week or on holiday, they will not be directly financially compensated for doing so. Generally speaking, wage-earners tend to earn less than salaried employees. For instance, a barista that works in a cafe may earn a “wage,” while a professional that works in an office setting may earn a “salary.” As a result, salaried positions often have a higher perceived status in society.

Most salaries and wages are paid periodically, typically monthly, semi-monthly, bi-weekly, weekly, etc. Although it is called a Salary Calculator, wage-earners may still use the calculator to convert amounts.

What is Gross Annual Income?

Gross annual income refers to the total earnings before deductions during a fiscal year. The concept of gross annual income is vital to both individuals and businesses, especially when it comes to preparing income tax returns or applying for loans.

Personal gross annual income is the amount you earn in one year before taxes and deductions. Your gross annual income includes your salary, bonuses, overtime, commissions, and any other sources of income.

If you are a full-time employee, then you properly receive a paycheck. You can calculate your gross annual income by multiplying the amount of the paycheck by the number of pay cycles. If you receive a paycheck once a month, then multiply by 12. If you receive it weekly, then multiply by 52.

Gross annual income is the base number you will start with when filing your income taxes. Knowing your gross annual income helps you have an awareness of what taxes you owe or be returned. You will also use your gross annual income when applying for a loan or credit card, or proving child support and alimony.

Business gross annual income refers to all earnings your business generates during the fiscal year. Gross annual income in a company is calculated by deducting the cost of goods sold from the total company sales.

Examples of Gross Income Calculations

Understanding equations can give you a good general idea about how to go about figuring out your individual or company’s gross income. Seeing these equations applied to relevant examples can further this understanding and help you use the formulas in your own life.

Samantha works at a restaurant as a waitress 25 hours a week, where she earns $9 per hour. In addition to her hourly wage, she receives an additional $125 in tips every week on average.

Samantha is applying for a credit card and has been asked to provide her gross income per month to confirm her eligibility. She uses the following equations to find her gross monthly income and apply for the credit card.

First, Samantha determines her weekly pay by multiplying her hourly wage by how many hours she works per week.

25 Hours Per Week X 9 Dollars Per Hour = $225 Weekly Payroll

Since Samantha makes tips every week, she adds the number of tips she makes per week to her weekly pay.

225 Hourly Pay + 125 In Tips = $350

Then, she finds her annual salary by multiplying her weekly pay by 52.

350 Dollars Per Week X 52 = $18,200 Annual Salary

Finally, she divides her annual salary by 12 to determine her gross income per month.

18,200 Annual Salary / 12 = 800,516.70 Monthly Gross Income

James works for Kingston Dental Group as a full-time office manager. He earns an annual salary of $60,000 per year for his supervisory role. In addition to his salaried position, James works freelance doing translation services on the side, which earns him an extra $700 per month.

James is planning on buying his first house with his wife and wants to consider his finances to determine what their budget should be and if they can fulfill loan requirements. He decides to calculate his gross monthly income to make the decision.

To arrive at his gross income per month, James divides his annual income by 12.

60,000 Dollars Per Year / 12= $5,000 Gross Income Per Month

Since James also receives monthly earnings from his freelance graphic design work, he adds that income to his gross monthly income.

5,000 + 700 = $5,700

With this information, James and his family can decide how much they can afford to pay on their mortgage per month and what their budget limitations should be.

  • Children’s Illustration Organization: 800,000 Per Month Set Rate

  • Nature Wildlife Magazine for Kids: $16 Per Hour for 20 hours a week

  • Digital Album Design: $150 per Project with 5 Projects per Month

Source:

https://www.calculator.net/salary-calculator.html
https://www.mageplaza.com/blog/gross-income.html
https://www.zippia.com/advice/gross-monthly-income/