# How to Calculate Total Monthly Income

Your total monthly income is the amount after taxes, pretax retirement contributions, medical insurance payments and any other payments are deducted from you paychecks.  This is the amount you have to spend each month on your budget line items.

Most employers make your deductions for you before they issue your check, but sometimes its hard to know how much is being taken out.

1. Figure out your monthly salary. If your employer pays you an hourly rate, multiply that amount by the amount of hours you work a week and then by 52 weeks to come up with an annual salary, then divide by 12 to get your monthly salary. If the employer pays you an annual salary, divide it by 12 to get your monthly salary.
2. List your pretax payroll deductions. These include health insurance you receive through the employer and contributions to 401(k), health savings and child care expense accounts. The amounts that are deducted for this in each pay period should be included on your paystub.
3. Calculate the amount of your monthly pretax payroll deductions. Most deductions are a flat rate, but contributions to a 401(k) account usually are a percentage of your monthly salary. If you contribute 10 percent to your 401(k), multiply your monthly gross salary by 10 percent. Add up these deductions and write the total down or mark it as “Pretax Deductions” in a spreadsheet.
5. Calculate your monthly Medicare and Social Security tax deductions. Multiply your gross monthly salary by 5.65 percent to get your deduction for Medicare and Social Security taxes each month. Enter this number into your spreadsheet or write it down.
6. Calculate your federal taxes. To be safe, keep your estimate on the high side. Most likely, even if you are in the 25 percent tax bracket, you will not have 25 percent taken from your paycheck each month. Assume that at least 20 percent will be taken from your paycheck. Multiply this percentage by your taxable monthly salary you calculated in Step 4.
7. As time goes on, you can adjust this amount based on the paychecks you received. Or if you made the same amount last year, you can refer to old pay stubs or old tax forms to find out how much money was taken out of your paycheck for the year. Divide that amount by 12 to find your monthly federal taxes. Enter this amount into your spreadsheet or write it down.
8. Calculate your state and local taxes. The best way to do this is to refer to your previous year’s state tax return. State and county taxes tend to be a flat rate. For example, your state taxes might be 5 percent and your county tax may be .05 percent. Multiply your taxable month salary from Step 4 by your combined state and county tax rate (5.5 percent in the example). Enter this into your spreadsheet or write it down.
9. Total all your monthly payroll deductions: pretax deductions; federal taxes; Social Security and Medicare taxes; and state/local taxes. Subtract this amount from your monthly salary. This number is roughly your salary after taxes.

To figure out how much you will actually take home, you will also need to subtract any after-tax deductions that your employer might make, such as deductions for union dues or to pay for a cell phone or some other product through a payroll payment plan. After these payments have been subtracted.  The total amount you have left over after all taxes, deductions and payments is your total monthly income.