Gross income is the amount of money earned before any payroll deductions for taxes, insurance, retirement contributions, and such. To calculate gross monthly income from a biweekly paycheck, find the gross amount listed on the pay stub (usually the starting number), multiply that figure by 26 (the number of paychecks received in a year), and then divide by 12 (the number of months in a year).
The calculation of gross monthly income varies with paycheck frequency. Below, we’ll show you how to calculate your gross pay for different payroll schedules.
Table of Contents
Key Points
• Gross monthly income is calculated by adding up all sources of income, including wages, tips, rental income, and bonuses, before things like tax deductions.
• Biweekly pay differs from semimonthly pay in that you can’t just multiply one paycheck by two to find your monthly salary.
• Knowing your gross monthly income is important for budgeting and loan applications.
• To calculate gross monthly income from a biweekly paycheck, multiply the gross amount listed on the pay stub by 26, then divide by 12.
• One benefit of biweekly pay is the perception of receiving a third “bonus” check two months out of the year.
How to Calculate Monthly Pay From Biweekly Pay
There are two different monthly pay figures to understand: gross and net. Each is useful in different situations. When you’re applying for a loan, most lenders use gross monthly income to determine your debt-to-income ratio (DTI). However, many people find it easier to budget based on net or take-home pay. A budget planner app can help you determine the best approach for your situation.
As noted above, if you’re paid biweekly (every two weeks), the formula for gross monthly income is:
(Gross pay amount × 26) ÷ 12
Hourly workers can also use this next formula if they work a consistent number of hours per week:
(Hourly salary × weekly hours worked × 52) ÷ 12
To find your net monthly pay, use the first formula, but replace gross pay with net pay.
Check your score with SoFi
Track your credit score for free. Sign up and get $10.*
Recommended: Does Net Worth Include Home Equity?
How Many Bi-Weeks in a Year?
There are 26 biweekly pay periods in a year, meaning that employees paid biweekly will receive 26 paychecks throughout the year.
It’s important to note that biweekly pay differs from twice-monthly pay on the same dates. Workers who receive biweekly checks can’t just multiply one paycheck by two to find their monthly salary because there aren’t exactly two biweekly periods in every calendar month.
Employees who get paid twice a month — for instance, on the 15th and the 30th — can find their monthly gross income simply by adding together the gross figures on their two monthly paychecks.
Recommended: 52 Week Savings Challenge (2024 Edition)
The Different Types of Payment Periods
The most common pay periods for employees are:
• Biweekly: Paid every other week, or 26 paychecks per year
• Semimonthly: Paid twice a month on the same dates, or 24 checks per year
• Weekly: Paid once a week, or 52 checks per year
• Monthly: Paid once a month, or 12 checks per year
Employees who receive biweekly pay get two checks or direct deposits each month, except for two months of the year when they receive three paychecks. Employees paid biweekly may receive a paycheck every other Wednesday, Friday, or on any day their employer chooses.
With semimonthly pay, an employee might get paid on the 15th and 30th of every month. There are always two paydays, for a total of 24 per year instead of 26.
An employee paid twice a week is on a semiweekly schedule, which results in eight paychecks per month, nine in some months.
Pros and Cons of Biweekly vs Semimonthly Pay
There are both pros and cons to biweekly pay. Depending on their expenses and savings strategy, some employees might prefer biweekly pay to semimonthly pay.
For some workers, the main benefit of biweekly pay is the perception of a third “bonus” check they receive twice a year, even though it is not additional earnings. By budgeting for two paychecks per month, workers can allocate the occasional third check to special line items such as vacations, holiday gifts, debt repayment, or savings.
For others, biweekly checks make budgeting and managing expenses more challenging. Semimonthly pay is preferable because it provides a more accurate reflection of monthly income.
You can also assign each semimonthly check to a specific expense. For example, you could use the second check of the month for rent, utilities, and other housing costs, which are often due on the first of the following month.
Compared with weekly paychecks, biweekly and semiweekly payments require more careful cash management. For those who live paycheck to paycheck, biweekly pay periods might mean they run out of money before the next check arrives.
The Takeaway
To calculate gross monthly income from a biweekly paycheck, find the gross amount listed on your pay stub, multiply it by 26, then divide by 12. (Do not use this formula if you’re paid twice a month on the same dates rather than the same days of the week.) For your monthly net pay, substitute your net or take-home pay for the gross amount in the same calculation.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
FAQ
How do I convert biweekly pay to monthly income?
To calculate gross monthly income from a biweekly paycheck, find the gross amount listed on the pay stub (usually the starting number). Multiply that figure by 26 (the number of paychecks received in a year), then divide by 12 (the number of months in a year).
How do I calculate my gross monthly income?
Gross monthly income is the total of all paychecks and income received in a month, including any side hustles and rental income, before taxes and other deductions.
How do I calculate gross income from a W-2 form?
You may not always find gross wages on a W-2 form, due to various pre-tax deductions. Instead, look for the gross amount on your final paycheck for the year.
How do overtime or bonuses affect my gross monthly income calculation?
If overtime or bonuses are consistent, you can include their average amount in your biweekly gross pay before converting it to monthly income. Add your average overtime or bonus earnings to your regular biweekly gross pay, multiply by 26, and then divide by 12 to estimate your gross monthly income.
Why does my monthly income estimate vary if I’m paid biweekly?
Monthly income estimates can vary because some months do not contain exactly two biweekly pay periods. Some months will include three paychecks, which can make actual earnings appear higher in those months. Using the annualized method (biweekly pay × 26 ÷ 12) provides a consistent average gross monthly income despite these fluctuations.
Photo credit: iStock/Eva-Katalin
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
SORL-Q126-025