Paycheck Calculator

Before getting into how our paycheck calculator works, it helps to know the different types of wages you can calculate:

Hourly

If you are unsure how much you will make on hourly pay, you can plug your wages into the calculator to find out. This can be incredibly helpful in determining if your earnings are proportionate to the effort you put into your work.

Weekly

Knowing your weekly wages is helpful for more than just budgeting purposes. It is also often needed for certain things such as government aid applications, rental agreements, and car payments.

Monthly

Being aware of your monthly income is crucial to keeping a good budget, as most people make their budgets monthly. However, this information is also needed when you're looking to rent or lease a home.

Annually

You'll need your yearly income for applications such as the FAFSA and other student aid grants. You also might need to include this information when applying for a credit card or loan.

There are many reasons you should know all the details about your income. These include:

Tax Purposes

For both hourly workers and self-employed individuals, a wage calculator can help you predict how much you'll pay in taxes.

Pro tip: If you place 15% in a savings account for the end of the year, you will collect interest on the money you owe the government. You could actually make a small profit this way.

Credit

As we stated before, you may need to know your annual income when applying for a credit card. Other applications such as loans may also require this information. Knowing it will make any of these credit-building applications much easier.

Housing

As a general rule, you should try to aim for spending a third of your income on housing. Using a wage calculator will help you determine how much you can afford on housing.

Saving

Calculating your wages makes saving much easier as well. When you know how much you make after taxes, you can make a realistic budget for what you can afford to put away in a savings account or investment fund.

We all want more financial clarity in our lives. Knowing exactly how much you make and when you are making it is a crucial part of creating a sound budget. That clarity isn't always so easy to attain on your own though.

If you make an hourly wage, it can be difficult to know off hand how much you make in a month or in a year. If you want to have transparency about your income, we highly recommend using a paycheck calculator.

Rather than waiting until the month is over to calculate your weekly paychecks, you can use a wage calculator to know your regular income. You can also use the calculator with overtime to figure out how your overtime hours will affect your wages.

Frankly, there is no downside to taking advantage of this great tool.

You may be wondering how a wage calculator works. How does it take your wage rate or your salary and convert it into the desired metric you are looking for? It begins with calculating gross pay.

For hourly wages, gross pay is calculated by multiplying your pay rate by the number of hours you work in a week.

For salaried pay, if you are calculating gross pay for a single pay period, divide your annual salary by the number of pay periods in a year. For example, if you are paid weekly, divide your salary by 52.

This strategy is adjustable to any amount of time on the calculator. So if you prefer to make weekly budgets, you can calculate your weekly paycheck to assist you in that process. If you prefer monthly budgets, calculate monthly income.

If you have any other questions about wage calculators and how they work, feel free to contact us and let us know!