When one has a paystub, one should look for gross income which is the income that one has earned without any deductions or tax deductions. When one has a paystub, one will be able to see overtime pay, commissions, and other bonuses and this is part of gross income. An employee should find out how much their total for non-taxable wages are and one can do this by adding up employer insurance, partnership income, gifts, and disability wages. The next step is to get the gross income from the pay stub and deduct the non-taxable wages.
By adding retirement accounts, employer benefits, health insurance, life insurance among others, one will be able to find their pre-tax deductions. one should take the total of pre-tax deductions and deduct this from the figure that one obtained after deducting non taxable wages above. One will now have their taxable income for the year after this. By looking at the W2 that one may have obtained, one will find this total for the taxable income of the year.
State, income, and local taxes make up annual taxes that one will pay and one should add this to see the final figure. The times that one is paid in a year will then be multiplied with the total annual taxes. The amount that one will get is what will be deducted from earnings. From the taxable income of the year, one will subtract the annual taxes. This total amount that one has obtained is the W-2 earnings or the net income of the year.
If one does not mind calculating their taxable income, they can follow the steps, and this is how one calculates their W2 wages. Instead of rushing during the tax season, one can start the tax process early when they make these calculations. When one is planning for their finances, one can do this early to find out the net income of the year. This information can also help one to make decisions on investment and spending.
If one does not have a paystub, one can visit a website where they can get a paystub from a paystub creator. One will not spend much of their time trying to create a pay stub since the process is quick. There may be a process that one has to follow when one is interested in creating a paystub, and one can get this information when they visit the site of paystub creators. Practice of the calculations on the net income of the year will become simpler with time. One may need to make math corrections when one is calculating the net income of the year if they have never done this before and they make a mistake.