Your gross income is the total compensation money made in a certain period of time before deducting taxes, insurance, pensions, etc. Although the value of net income (the amount of money actually received) is more relevant to everyday life, there are several reasons gross income is worth knowing. Perhaps, you want to know the amount of tax withheld from your salary, or you want to know the amount of gross income you need to achieve to get the desired net income. Whatever the reason, your gross income over a period of time can be calculated with a simple calculation.
Step
Method 1 of 3: Determining Gross Hourly Earnings
Step 1. Add up the hours worked during the period you want to calculate
You can find your gross income per year, month, biweekly, or even daily as you wish, as long as you know how many hours you worked during that period.
For example, suppose you work 25 hours each week of the year
Step 2. Include overtime or double-time
If you work extra hours on weekdays or holidays, you may receive additional hourly earnings.
- The use of overtime rates and work on holidays is different in each company. Ask how much overtime and holiday rates apply at your workplace.
- While part-timers usually don't have a lot of overtime, let's assume that you worked double-time last week (and every week for the previous year). Since the pay is doubled for five hours of last week's 25 hours, the pay is equal to 30 hours of regular work ([20 x 1] + [5 x 2] = 30).
Step 3. Multiply your total hours worked by the hourly rate of pay
Consult payroll or a coworker if you don't know the hourly rate at your workplace.
- In this example, we assume a salary rate of $13,500 per hour. Therefore, 30 x $13,500 = $405,000. In a year (52 weeks), your total earnings will be 52 x $40 = $21,060,000.
- If you are not good at math, or have a lot of overtime, etc., you can use an online calculator available on the internet.
Step 4. Add up all tips, commissions or bonuses during the calculation period
Gross income includes all money received from work without deducting anything.
- Let's say last week you received a $45.00 bonus for consistently good productivity so the bonus was received every week for the past year.
- Thus, your new total is IDR 405,000 + IDR 45,000 = IDR 450,000 per week, and IDR 405,000 x 52 = IDR 23,400,000 per year.
- From the example above, the gross weekly income increases to IDR 450,000 per week and IDR 23,400,000 per year. This is the income for the period calculated before deducting taxes and all other deductions.
Step 5. Compare your calculations with the payroll document
You should obtain a payslip or other similar income receipt document. From here you can see the amount of gross income in a certain period.
If your taxes are paid by the company, you will receive proof of withholding income from the company showing the amount of tax paid on your income for a particular tax year
Method 2 of 3: Determining Gross Income from Salary
Step 1. Determine your base salary
Employees who are contracted by the company are given salaries in a certain amount and period of time, regardless of the number of hours worked (except maybe during overtime). Usually, salary refers to basic income for a year
For example, let's say you receive a base salary of $30,000
Step 2. Divide the total base salary by 12 (monthly), 26 (bi-weekly), 52 (weekly), or 365 (daily)
This calculation only applies to salaries paid in a period of a year or less.
For example, your base salary (Rp 30,000,000 for a year) is Rp 577,000 per week (Rp 30,000,000 / 52 = Rp 577,000)
Step 3. Add money tips, commissions or bonuses during the calculation period
Remember that gross income includes everything you make at work, without deducting anything.
- To simplify, let's say you hit a high sales mark and earned $120,000 in commissions every week for the past year. After adding up your basic salary and overtime of IDR 577,000, your total weekly gross salary is IDR 697,000. This is your weekly gross salary.
- That means, for a year, your gross salary is IDR 697,000 x 52 = IDR 36,244,000.
Step 4. Compare this calculation with your salary document
As a permanent employee, you will receive payslips (paper or electronic), usually at one or two week intervals, or monthly. This slip will show your gross income, along with your net salary after deducting taxes and other expenses.
In the US, W-2 forms will be received during tax season, and will show your gross income for the last calendar year
Method 3 of 3: Setting a Gross Income Target
Step 1. Determine your net income target
Simply put, how much money would you like to receive net each week, month, or year to make a living? The purpose of this calculation is to find the amount of gross income needed to obtain the desired amount of net income.
For example, let's say you need to earn $2,100 in net income each month to pay your monthly fees and some savings. We also assume that your current net income is IDR 1,800,000
Step 2. Use the most recent payslip to determine a rough percentage of net income to gross income
For example, if your gross weekly salary is $600 (or $2,400 monthly) and you earn $450,000 per week (or $1,800,000 monthly), your net income is 75% of your gross income.
The calculation is: 450 / 600 = 0.75 (weekly), or 1800 / 2400 = 0.75 (monthly)
Step 3. Share your target net income based on that percentage
If you want a net income of IDR 2,100,000 per month and the percentage of net income to gross income is 75% (due to taxes and other deductions), you can determine the required gross income target
- The calculation is as follows: IDR 2,100,000 / 0.75 = IDR 2,800,000. So, if you want a net income of IDR 2,100,000 per month, your target gross income is IDR 2,800,000 per month (IDR 700,000 per week).
- It should be noted that this method only provides approximate figures, and is most effective if current and target earnings are not too far apart. Differences in tax rates (for example) will mess up your calculations.
Step 4. Use a back tax calculator
If you already have a net income target, there are various options on the internet for determining the amount of gross income you need to achieve.
