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# How to Calculate Net Monthly Income

If you are an employee, your monthly net income is your take-home pay for the month, after deductions have been withheld. If you are a business, your monthly net income is your monthly earnings or profit. The calculations for both situations vary.

#### Items you will need

• Pay stub
• Cash flow statement

## Employee Monthly Net

Figure your hours worked for the year. The calendar year has 2,080 hours. To determine your hours for the month, calculate as follows: 2,080 / 12 = 173.33 hours.

Figure monthly gross pay based on your salary. For instance, say your annual salary is \$50,000. Calculate your gross monthly pay as follows: \$50,000 / 12 pay periods = \$4,166.67. Verify your gross monthly income by using a semi-monthly payroll, which occurs twice per month: \$50,000 / 24 pay periods = \$2,083.33 x 2 = \$4,166.67.

Subtract monthly deductions from your gross monthly pay. This includes federal, state and FICA taxes, plus involuntary deductions such as health and retirement benefits. The result is your net monthly income.