What is gross monthly income?
Gross monthly income is the total amount you earn each month before taxes and other deductions are taken out. It is the term you come across when applying for a loan, renting an apartment, or planning your budget. Use the calculator to work yours out.
Gross monthly income calculator
Pick how you are paid and enter one number. You get the monthly figure with the arithmetic beside it.
You can enter salaried, hourly or self-employed pay, plus bonuses, commissions, tips and overtime.
Before you use this
This is an estimate, not tax or lending advice. You do not become a client by using it, and Dimov Audit has not reviewed your figures.
You supply the numbers and we do not check them. Enter your salary before tax, the hours you work and any bonus you expect to receive again. If you enter one wrong figure, the answer is wrong.
We do not store or send the figures you enter.
Gross is not what you take home. You will not get a tax, withholding or net pay estimate here.
Lenders and landlords apply their own rules. A lender may average variable income and will want documents behind it, so your figure here can be higher than the one the lender uses.
Accept the terms to run a calculation.
Read this before you use a number from here
Check the result against your own pay stubs, contract, W-2 or 1099 before you put it on an application.
Gross, not net. Gross monthly income is what you earn before income tax, Social Security and Medicare, insurance premiums and retirement contributions.
What a lender counts. A lender can count bonuses, commissions and tips when you can document a history of them. Treat the figure here as your starting point.
Rounding. We round each line to the nearest cent and add the rounded lines, so the total can differ by a cent from a full-precision sum.
Scope. Earned income only. We leave out rental income, investment income, alimony, child support, Social Security, pensions, disability and other unearned income, and a lender may still count them.
How to calculate gross monthly income
You calculate it differently depending on how you are paid:
Annual salary. Divide your annual salary by 12. Example: $72,000 divided by 12 is $6,000 gross monthly income.
Hourly with steady hours. Multiply your hourly rate by regular hours per week, multiply by 52, then divide by 12. Example: $18 times 40 hours times 52 divided by 12 is $3,120. If your hours vary, use an average you can support with your pay records.
Freelance, contract or gig work. Divide annual nonemployee compensation or gross receipts by 12 for a rough receipts estimate. Example: $90,000 divided by 12 is $7,500. A lender calculates qualifying income from tax returns and business cash flow instead.
Paid weekly or biweekly. Multiply a weekly paycheck by 52 or a biweekly paycheck by 26, then divide by 12. If you double a biweekly paycheck, you leave out two pay periods a year.
Bonuses, commissions, tips and overtime. Include them before deductions: divide the annual amount by 12 and add it. A lender applies its own rules to them.
Four ways to work out gross monthly income
Pick the row that matches how you are paid.
Salaried
Annual salary ÷ 12
$72,000 ÷ 12 = $6,000 a month
Hourly
Hourly rate × hours a week × 52 ÷ 12
$18 × 40 × 52 ÷ 12 = $3,120 a month
Paid every two weeks
One paycheck × 26 ÷ 12, not × 2
$2,000 × 26 ÷ 12 = $4,333.33 a month
Self-employed
Annual gross receipts ÷ 12
$90,000 ÷ 12 = $7,500 a month in receipts
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Gross pay, then the deductions
Gross is what you earn. Net is what you receive after deductions.
Gross monthly income
Everything you earn in the month before anything is taken out
- Federal and state income tax
- Social Security and Medicare
- Health insurance premiums
- Retirement contributions
Net monthly income
What you receive in your bank account, also called take-home pay
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Gross income vs net income
Gross income is total earnings before any payroll deductions.
Net income is what remains after taxes and other deductions, the amount deposited into your bank account.
Lenders and landlords ask for gross income on applications. For your own budget, work from net income, because that is what you can spend.
Is gross monthly income before or after taxes
Before. Use the gross pay line on your pay stub, ahead of tax, insurance and retirement deductions. The figure after deductions is net pay.
Where to find your gross monthly income
You find your gross monthly income in three places:
- Pay stubs. The line marked gross pay, before deductions.
- Contracts. Your annual or monthly salary, as stated.
- Tax documents. Your employer reports compensation on Form W-2, and a payer on Form 1099-NEC; those figures may differ from your total gross pay.
Where to find the number
Three documents, three places to look.
- 1
Pay stub
Look for the line marked Gross pay, not Net pay
- 2
Offer letter or contract
Annual salary ÷ 12, or the monthly figure if it is stated
- 3
W-2 or 1099-NEC
Reported compensation, which can differ from total gross pay
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What lenders and landlords do with the number
Two checks based on your gross income
Landlords
Rent as a share of your income
Monthly rent ÷ gross monthly income
Lenders
They divide your monthly debt payments by gross monthly income to get your debt-to-income ratio
Monthly debt payments ÷ gross monthly income = DTI
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Why gross monthly income matters
You need your gross monthly income, and the documents behind it, for:
- Loans and credit. Banks use it to work out your debt-to-income ratio.
- Rental applications. A landlord may compare your gross monthly income with the monthly rent.
- Government programs. Each agency sets its own income definition, exclusions and limits for its programs.
- Financial tools. You use it as the starting figure for tax estimates and budgets.
Related reading
Use this as general information, not advice for your circumstances.
Help documenting your income
We help in three places once you need income figures a third party will accept:
Books that match the income
We keep your books in a state a lender or a landlord will accept.
Statements a third party will take
Financial statement work when a bank, an investor or a board wants more than a pay stub.
An audit already underway
Support when the documentation you filed is the thing being examined.
Need a CPA to look at the numbers
If your income is uneven, comes from more than one source, or you need it for a loan application or a tax return, our team can help you document it.
Contact
Connect with Dimov Audit
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New York, NY 10013
United States
Reviewed by George Dimov, CPA. Dimov Audit provides bookkeeping and financial statement work for individuals and businesses across all 50 states.