Please help me learn how to figure income, it keeps changing.

[boxmover]

			year to date	year to date
			gross	gross
	base hourly rate	pay period end	regular base	plus shift differential, OT, etc.
current	23.35	12/27/24	32176.18	42657.20
annual raise	23.35	10/11/24	23086.03	30196.05
	21.85	10/04/24	22555.52	29526.17
tenure raise	21.85	06/21/24	15786.84	19572.27
	21.45	06/14/24	15128.06	18758.07
		12/28/23	32174.18	37338.59
tenure raise	21.45	12/22/23	31465.90	36472.87
	21.05	12/15/23	30812.75	35594.49
annual raise	21.05	10/13/23	26733.05	30746.56
	20.05	10/06/23	26091.02	30104.53
tenure raise	20.05	06/23/23	16301.00	18299.56
	19.65	06/16/23	15604.86	17603.42
	19.65	01/06/23

So, it took me about 2 hours to get this much organized looking through past statements. I need help to know what my annual income is for a planned mortgage application this summer (after my base pay rises to 24.15 or 25.30 if shift differential is included).

There's documentation for all the pay increases but the hours worked are so jumbled with premium pay, shift differental, overtime, personal paid time, vacation, etc. it's impossible for me to see average hours, and though I've been scheduled for 40 hours per week for approximately the last 6 months (will be a year by the time of mortgage app), previously I was scheduled for 30 hours per week and consistently worked over 30/hrs/wk.

Please help me learn how to figure out what my annual income is for mortgage income, and Happy New Year!

edit, too tired, forgot screenshots:

2023 year end:

2024 year end:

so is it regular earnings only, the gross pay totals with all the extras, or something else? TIA

[Roadgeek395]

Your annual income is your gross pay with all the extras included. For 2024 your annual income was $42,657.20

[boxmover]

Wow, that's a lot simpler than expected! I thought it was complicated because of the explanation about effective income found online:

Calculation of Effective Income: Hourly
• For Hourly wage earners whose:
– Hours do not vary, the Mortgagee must consider the
Borrower’s current hourly rate to calculate Effective Income.
– Hours vary, the Mortgagee must average the income over the previous two years.
• If the Mortgagee can document an increase in pay rate, the Mortgagee may use the most recent 12-month average of hours at the current pay rate.

I didn't realize income is just income since I can't for the life of me figure out my actual hours. Thank you!

[Roadgeek395]

In my personal experience I've never had a financial institution ask for effective income. I've only ever been asked for annual income.

Glad I was able to help. Happy New Year 🥳 

[ptatohed]

More or less, a quick rule of thumb calc for your annual income is your $hourly x 2 x 1,000.    i.e., if you make $30/hr, your annual is ~$60k.   

[WiFlyer]

That actually cuts you a little short.  The standard formula is Weekly Hours x 52(Weeks in Year) x Hourly Rate.  Since 40(hours) x 52(weeks) is 2080, the simplified annual is Hourly Rate x 2080.  That does not take into account any overtime/shift differentials/etc.

[Kforce]

I was taught that for a normal 40hr week the formula was;

Hr/rate * 168 * 12  -- (hr rate * average hrs month * 12 months)

30*168*12  = 60,480 

Lots of different easy rounding formulas.   

This is only $80 off from @WiFlyer 's formula, both are ~$400 larger than @ptatohed's

[FicoMike0]

I use @ptatohed s formula as an easy approximation.

To get a more precise answer, you have to answer some questions,

Are you paid hourly?

If so, are you paid the same rate for all hours?

If not, do you want to account for each rate separately, or use an average?

How many hours do you work each week?

Are you paid for normal work hours that you're not scheduled to work, such as holidays?

[boxmover]

---

I use @ptatohed s formula as an easy approximation. That's what I ended up doing because trying to figure out exact ended up feeling silly tedious.

To get a more precise answer, you have to answer some questions,

Are you paid hourly? Yes

If so, are you paid the same rate for all hours? Usually. Rarely there are extra dollars added to hourly rate, such as when others are unwilling to work or the company is short-staffed.

If not, do you want to account for each rate separately, or use an average? I did want to account for specific types of pay and hours, but it felt rediculous after a couple hours of trying, since mathematically the impact wouldn't be worth it in figuring DTI as I'm not "borderline" anything that I know of at least.

(edited out line items since I forgot I'd already posted a pic in a previous post, sorry about that)

How many hours do you work each week? Ah, that was the root of my problem. In the first half of 2024, 30-ish, in the last 1/3 ~35-ish, in the last 1/4, 40-ish. I also received 2 or 3 raises, can't remember, and also went from no differential to $0.60/hr and now officially $1.15/hr. I'm scheduled for full-time hours (40/wk) since December 2024 with $1.15 hourly differential on top of $23.35/hr. which should be $24.50/hr and $50,960/yr.

For 2025, I'm trying to keep it simple at 40 hours / week with a fixed (vs. flexible) schedule, now that I see my income was complicated and I have a goal to qualify for a $150k-$175k mortgage.

Are you paid for normal work hours that you're not scheduled to work, such as holidays? Yes now at 7 holidays per year.

[WiFlyer]

It would be a simple spreadsheet to build.

Column1:  WeekNumber (1-52 so 52 rows)

Column2:  HoursWorked (Start with your standard weekly hours and update with actual as each week passes)

Column3:  HolidayHours (Start with standard work hours on weeks where a holiday falls and update with actual holiday hours paid)

Column4:  PayRate (Start with you hourly rate and update with any changes)

Column5:  ShiftDifferential (0 if you don't get it, the amount if you do)

Column6:  WeeklyPay (Column2 + Column3) *(Column4+Column5)  Formula (assuming header row): =(B2+C2)*(D2+E2)

The first step to paying off your debt (or simply paying your bills) is to know how much you have coming in.