The salary posted by most employers when searching for job candidates is the gross income. Gross income is the amount you earn at your job before any taxes, 401(k) contributions, pension contributions, 401(k) loans, insurance premiums and other payments are withheld. Calculating your gross pay is fairly easy.
Step 1
Collect the information and materials you will need to calculate your gross income. This includes your most recent W-2, a recent pay stub and a calculator. You can use a pen and paper for these calculations, but it's faster with a calculator. A W-2 will help you calculate your total gross monthly income for the year, but a paycheck will give specific monthly gross pay if your income fluctuates from month-to-month.
Step 2
Calculate your estimated monthly gross income using your W-2. Simply divide your earnings from box 1, or Wages, Tips and Other Compensation, on your W-2 by 12. This is your estimated monthly gross income.
Step 3
If you don't have your W-2 available, you can calculate your monthly gross income using your pay stub. Divide the gross amount (before all taxes and withholding) from your check by two if you are paid biweekly. This is your weekly gross income. Multiply this number by 52 (for 52 weeks) and divide that result by 12. This is your actual monthly gross income.
Step 4
Verify your total gross annual income by multiplying the weekly pay rate by 52, for 52 weeks. This number should match your current annual salary.