Rental applications, loan forms, and benefit programs often ask for your annual income. Usually they mean gross annual income: everything you earn in a year before taxes and deductions. Here is how to add it up.
Step 1: Base pay
For hourly pay:
Base pay = hourly rate × hours per week × paid weeks per year
$30.00 an hour at 40 hours a week for 52 weeks is $62,400. If you take unpaid weeks off, use the number of weeks you are actually paid.
For a salary, base pay is the annual salary.
Step 2: Overtime
Use your average overtime over a typical stretch, such as the last few months:
Overtime = hourly rate × overtime multiplier × average overtime hours per week × weeks
5 overtime hours a week at time and a half on $30.00 is $45.00 × 5 × 52 = $11,700.
Step 3: Other income
Add yearly bonuses, commission, tips, and income from any other job. A $1,000 bonus brings the example to:
| Income | Amount |
|---|---|
| Base pay | $62,400 |
| Overtime | $11,700 |
| Bonus | $1,000 |
| Annual income | $75,100 |
Converting from other pay periods
| If you know your pay per | Multiply by |
|---|---|
| Week | 52 |
| Two weeks (biweekly) | 26 |
| Half month (semimonthly) | 24 |
| Month | 12 |
$4,000 a month is $48,000 a year. A $2,000 biweekly paycheck is $52,000 a year.
Variable income
If your hours, overtime, or tips change a lot, use an average over a longer period, or the totals from last year’s W-2 if your pay hasn’t changed much. Lenders and agencies sometimes have their own rules for counting variable income; when a form explains how to count it, follow those instructions.
Gross, not net
Annual income usually means gross income. Your take-home pay is lower after taxes and deductions. See gross pay vs net pay.
Tools
- Annual income calculator: base pay, overtime, and extras in one yearly total.
- Hourly to salary calculator: convert one rate into every pay period.
- Gross pay calculator: income for a single paycheck.
About this guide. Written for US employees as general information, not legal or tax advice. Rules can differ by state, employer, and contract. See our methodology and disclaimer.