Salary Breakdown Calculator
See how much you really make per hour, day, and minute!
Understanding Your Salary & Compensation
Understanding your compensation is the first step toward financial literacy. This calculator helps you convert between different pay periods and understand your true take-home pay after taxes and deductions.
Salary Fundamentals
Your salary is more than just a number—it's the foundation of your financial life. Here are key concepts to understand:
💵 Gross Pay
Your total earnings before any deductions. This is the "sticker price" of your compensation package.
💰 Net Pay
Your take-home pay after all deductions (taxes, insurance, retirement, etc.). This is what actually hits your bank account.
Pay Frequencies Explained
Different companies use different pay schedules. Here's how they compare:
| Frequency | Pay Periods/Year | Common Industries | Pros | Cons |
|---|---|---|---|---|
| Weekly | 52 | Retail, Hospitality, Healthcare | Frequent paychecks | Harder to budget long-term |
| Bi-Weekly | 26 | Most corporate jobs | Balance of frequency and consistency | Two months/year have three pay periods |
| Semi-Monthly | 24 | Professional services, Education | Consistent pay dates | Pay periods vary in length |
| Monthly | 12 | Government, Academia | Simplifies monthly budgeting | Long wait between paychecks |
Tax & Deductions
Understanding what comes out of your paycheck is crucial for financial planning:
📝 Mandatory Deductions
- Federal Income Tax: Based on W-4 and tax brackets
- Social Security: 6.2% of first $160,200 (2023)
- Medicare: 1.45% (2.35% over $200k single/$250k married)
- State/Local Taxes: Varies by location
💼 Voluntary Deductions
- 401(k)/403(b): Pre-tax retirement savings
- Health Insurance: Medical, dental, vision
- HSA/FSA: Pre-tax medical spending
- Other Benefits: Life insurance, disability, etc.
How the Calculation Works
Our calculator uses these standard conversions (based on 40-hour work week, 52 weeks/year):
🔢 Conversion Formulas
- Annual to Monthly:
annualSalary ÷ 12 - Annual to Biweekly:
annualSalary ÷ 26 - Annual to Weekly:
annualSalary ÷ 52 - Annual to Hourly:
annualSalary ÷ (40 × 52) - Hourly to Annual:
hourlyRate × 40 × 52
Note: For part-time work, adjust the hours per week in the calculator. The standard work year is 2,080 hours (40 hours/week × 52 weeks).
Financial Planning
Understanding your salary is just the beginning. Here's how to make the most of your income:
📊 The 50/30/20 Rule
- 50% Needs: Housing, food, utilities, transportation
- 30% Wants: Dining out, entertainment, travel
- 20% Savings: Emergency fund, retirement, debt repayment
💡 Smart Money Moves
- Build an emergency fund (3-6 months of expenses)
- Contribute enough to get any employer 401(k) match
- Pay down high-interest debt
- Automate savings and bill payments
FAQs
How do I calculate my take-home pay after taxes?
Your exact take-home pay depends on your tax filing status, allowances, and deductions. For a quick estimate, use the IRS withholding calculator or an online paycheck calculator that accounts for your state and local taxes.
What's the difference between bi-weekly and semi-monthly pay?
Bi-weekly means you're paid every two weeks (26 pay periods/year), while semi-monthly means you're paid twice per month (24 pay periods/year). Bi-weekly paychecks are slightly smaller but you get two "extra" paychecks each year.
How do I account for overtime in these calculations?
Overtime is typically paid at 1.5x your regular hourly rate for hours worked over 40 in a workweek. Since overtime isn't guaranteed, it's best to base your budget on your regular pay and consider overtime as a bonus.
How much should I be saving for retirement?
A good rule of thumb is to save 15% of your gross income for retirement, including any employer match. Start with contributing enough to get your full employer match (if available), then work up to the 15% goal.
What's the difference between gross and net pay?
Gross pay is your total compensation before any deductions. Net pay (take-home pay) is what remains after taxes, insurance, retirement contributions, and other deductions are subtracted from your gross pay.