How Do You Calculate Gross Annual Income?

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Locate the gross pay under the “Total Earnings” or “Gross Pay” section of a paycheck and multiply the amount by 12, 24, 26 or 52, according to Cynthia Measom for the Houston Chronicle. Multiply by 12 if payment is once a month or 24 for a pay frequency that is twice a month. Multiply by 26 if the payment cycle is every two weeks or 52 for weekly paychecks.

Measom mentions that annual gross income is a person’s yearly salary before deductions are made. Avoid using the “Net Pay” portion of the paycheck because this includes deductions from taxes and medical insurance. How often a person gets paid and the amount determines annual gross income. One example is a $1,200 weekly pay being multiplied by 52 to get an annual gross income of $62,400.

According to Measom, a distinction must be made between being paid twice a month and every two weeks, and confusing the two results in a wrong calculation. For example, being paid twice a month means being paid on scheduled payment days that may include the 1st and 15th of every month, while being paid on a bi-weekly basis means payment every 14 days. Payment every two weeks may also mean receiving payment three times a month at two times during the year.