If you have a job, you make a certain amount of money each year, which ultimately totals up to be your annual income. If you're unsure of how much income you bring home each year, there are several easy-to-use calculations that make it simple. There are a few different types of income, and being familiar with each will ensure your calculations are as accurate as possible. Here we explore what annual income is, the different types of income, how to calculate your yearly income in different scenarios, and examples you can use when calculating your own income. Show Annual income definedAnnual income is the total amount of money you make each year before deductions are taken out of your pay. For example, if you’re paid a $75,000 yearly salary, this is your annual income, even though you don’t actually take home $75,000 after deductions. This type of income is typically calculated by totaling how much a person makes from the first day of January of one year to the last day of December in the same year. However, some organizations, especially those belonging to the government, base their incomes off of a fiscal year, which is the first day of October or one year to the last day of September in the following year. There are two types of income that can fall under the yearly income umbrella. These types include:
Types of annual incomeThere are several types of income that are considered annual income. The most common types include:
How to calculate annual income for salaried employeesThe following are steps you can take to calculate your yearly income if you’re a salaried employee:
How to calculate annual income for hourly employeesHere are the steps you can use to calculate your yearly income if you’re an hourly employee:
ExamplesThe following is an example of calculating yearly income for a salaried employee: Sarah makes $2,500 every two weeks at her job and also earns an additional $10,000 each year doing freelance writing. Sarah’s yearly income from her position is $65,000 (2,500 x 26), so her total annual income is $75,000 (65,000 + 10,000.) Here is an example of the yearly income for an hourly employee: Susan makes $15 an hour at her job and works 40 hours each week. She also gets $20,000 in child support each year. Susan’s total income from her job is $31,200 (15 x 40 = 600, 600 x 52 = 31,200), and her total income with the child support is $51,200 (31,200 + 20,000). How do I figure out what my annual income is?How to calculate annual income. To calculate an annual salary, multiply the gross pay (before tax deductions) by the number of pay periods per year. For example, if an employee earns $1,500 per week, the individual's annual income would be 1,500 x 52 = $78,000.
What do you do if you don't know your annual income?If you are paid a weekly salary, but don't know your yearly income, multiply the weekly salary by the number of weeks you work in a year. For a monthly salary, multiply by 12 to calculate annual income.
|