How to Calculate your Take Home Pay

If you are an employee of some firm and you get monthly or weekly salary then you must know how to calculate your take home pay from your gross pay. In middle class working families, the salary coming from jobs we do is the major part of our income. The whole budget is made on the salary we get. Our day to day expenditure depends upon our salary. So it is very necessary to calculate the take home pay to avoid any confusing situation.

The take home salary can be calculated in some simple steps. These steps are as follows:

  1. Compute you gross salary. This is your salary before any deduction.
  2. Deduct involuntary deductions like income tax and wage garnishment from the gross salary. Income taxes normally include federal income tax, Medicare tax and social security tax. At some places, an extra tax named as city / state income tax is charged. You can deduct it also as per the rules of your locality. Wage garnishment consists of income from creditors, wage levies from the IRS and the state taxation agency and child support orders.
  3. Deduct voluntary deductions. These deductions are those which you agreed for to be deducted by the employer. This consists disability, medical, life insurance and dental insurance, parking fees, retirement contribution and union dues.
  4. Deduct all involuntary and voluntary deductions from your gross salary. The amount left is your take home pay.

The process of calculation of take home pay is very easy but for you ease, a pay check calculator is given below. You need to fill up the appropriate details in concerning blanks fields. The result will come up automatically.

General Information
Gross Pay
Gross Salary YTD (optional)
Pay Frequency
Federal Filing Status
# of Federal Allowances
Additional Fed. Withholding $
Round Federal Withholding Yes  No
I am exempt from: Federal Tax  FICA  Medicare
State and Local Information for Indiana
Filing status
Exemptions
Dependent Exemptions
Additional State W/H $
County Tax %
Voluntary Deduction Section
Use                                                                                                                                                          voluntary deduction(s) for my paycheck.
Deduction #1 Name
Deduction #1 Amount
Ded. #1 Exempt from: Federal  FICA  State  Local
Deduction #2 Name
Deduction #2 Amount
Ded. #2 Exempt from: Federal  FICA  State  Local

This paycheck calculator will easily find out your take home pay, net pay, taxes and other deductions also. I hope this article would have helped you in finding your take home pay.

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How to Calculate Withholding Tax

To withhold or deduct tax from the payment and pay that tax to the government is called withholding tax. This article will elaborate on how to calculate withholding tax through easy to follow steps. Generally, withholding tax is applied on employment income in most of the jurisdictions. In some jurisdictions, withholding tax is required on payments of interest or dividends also.

In many jurisdictions there are some additional withholding tax obligations as if the recipient of the income is a resident of a different jurisdiction. In these circumstances withholding tax sometimes applies on rent, royalties or even the sale of the real estate property. Government sometimes imposes additional withholding tax on industries where tax evasion is perceived to be common or if the recipient has been delinquent in filing tax returns.

Generally the payroll tax accounting field includes withholding tax in it. It is important to know how to calculate this amount manually to prevent possible computer errors. If not calculated correctly, withholding tax can cause severe damages which are enough to close businesses.

Steps for calculation

  • You will need a payroll accounting software. A payroll accounting system will help in the calculations of withholding tax. Many software programs come with the preprogrammed tax rates which are updated as tax rates change. It is automatically calculated by the software program.
  • Payroll documents: You will need employee payroll period information to calculate withholding tax. It is usually obtained from time sheets, time cards and date of hire. This information contains the number of hours worked and rate of pay per hour.

  • Gross payroll: Once you find out the hours worked and rate of pay, just multiply these data together. Withholding taxes are calculated on this gross payroll for hourly workers. It will be the annual salary divided by the pay periods for salaried workers.

  • Exemption Amounts: You will have to find out the employees’ exemption amounts from the W 9. The W 9 contains the employee filing status like married or single. If you are using payroll accounting software then this information would be entered into the software program on date of hire. For the calculation of federal and sometimes state withholding tax, exemption amount is needed.

  • Governmental tax documents: The IRS publication Circular E is needed for federal withholding and FICA (Federal Insurance Contributions Act) taxes. It includes tax tables for federal withholding taxes and tax rate calculations which are needed for determining FICA taxes. Every state has its own process to calculate withholding taxes for state withholding tax. Consult with the appropriate taxing officer for what you need for computation.

  • Calculate federal withholding: The Circular E has tax tables for federal withholding. Just look at the gross payroll amount and number of exemptions to find out federal withholding. It is needed to know the employee filing status (like single or married) and pay period (such as weekly or monthly). In this process no calculations is required.

  • Calculate state withholding: Every state does not have withholding taxes. You will require gross payroll figures to compute state withholding taxes. Contact your state’s taxing officer for what else is required to comply with tax requirements as it is different in each state.

  • Calculate FICA withholding: FICA tax involves Social Security and Medicare taxes. Information to calculate FICA taxes can be found in the IRS Circular E, also. The stipulated rate in effect at current time is multiplied by gross pay. This rate changes time to time and it is totally the employer’s responsibility to keep it alongside the rate in effect.

  • Calculate total withholding tax: Add the total federal, state and FICA withholding amount in context to calculate the total withholding tax. The data obtained is the withholding tax liability on the balance sheet. Here, the company will be acting as a collection agency for the affected taxing officer until the funds are paid.

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How to Calculate Volume of a Cube

A cube is a solid object that consists of six square faces. Each of these three faces meet at common point called the vertex of the cube. A cube is a geometrical three dimensional solid object. This article on how to calculate volume of a cube will help you in calculating volume of a cube using simple formula.

In case of a cube all the sides are of equal length and if you separate a single surface of a cube from its other faces then you will get the shape of the square. Calculating volume of a cube is just a matter of fraction of seconds.

Formula for calculating volume of a cube is given as,

Volume of a cube = a3

  • In the above formula, “a” is the measure of the length of the side of a cube whose volume is to be calculated.
  • The volume of a cube is expressed in terms of cubic units such as m3, cm3, etc.
  • If you want to calculate the volume of the cube then measure the length of one of the sides of the cube. It doesn’t really matter which side you are measuring, because all the sides are of equal length.
  • Place the value of the measured side of the cube in the above formula i.e. find out the cube of the side of cube.
  • This is the value of the volume of the cube.

Example:

Suppose the length of one of the sides of the cube is 12 m, then calculate the volume of the cube.

Volume of a cube = a3

Therefore,

Volume of a cube = 123

= 1728 m3

You can practice and calculate the volume of a cube for variable lengths of the sides of a cube. Using online calculators for finding the cube of the value will also help you if the numbers are too big.

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How to Calculate Volume of a Cone

Every one of us is familiar with the shape of a cone. A cone is a three dimensional geometric shape that has a broad base at one end and a narrow tapering end on the other side. A cone is a solid figure that is bounded by a plane base. This article on how to calculate volume of a cone will help you in calculating the volume of cone using simple formula.

The formula for calculating volume of cone is given as,

V = (1/3) π r2 h

In the above formula,

  • “V” represents the volume of the cone
  • “π” is a constant whose value is 3.14 or 22/7
  • “ r” is the radius of the base of the cone
  • “h” is the height of the cone

Volume of the cone is measured in cubic units.

If you want to calculate the volume of a cone you need to calculate the radius of the base of the cone and the height of the cone. The height of the cone is measured through the axis of the cone. The axis of the cone is the line that passes through the center of the base of the cone and passes through the converging point of the tapering end.

If you have been given the radius and height of the cone then you can insert these values in the above formula and calculate volume of the cone.

Example:

Suppose you have been given the value of the radius of the cone as 4 cm and height of the cone as 3.5 cm, then you can calculate the volume of the cone as follows,

Given:

Radius = r = 4 cm

Height = h = 3.5 cm

Volume of a cone = (1/3) π r2 h

Therefore,

Volume of a cone = (1/3) × 3.14 × 42 × 3.5

= 58.6133 cm3

You can also use online calculators for calculating volume of a cone inserting the values of radius and height cone into the required fields and click on calculate button. Online calculators can be used if the calculations are big enough.

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How to Calculate VAT

VAT is actually a value added tax. It is a form of a consumption tax. It is a tax on materials at each stage of its manufacture or distribution or the estimated market value added to a product. This tax is ultimately passed to the consumer from the manufacturer. It is different from sales tax as it is levied only at the point of purchase. This article will describe how to calculate VAT in simple steps.

Maurice Laure, the direction generale des imports (joint director of the French tax authority), was the first person to introduce VAT. It was introduced on April 10, 1954. In the beginning it was directed at large businesses. After some time, it was extended over to include all types of business sectors.

Business can recover VAT on the products and services which they buy in order to manufacture further goods and services which are to be sold to another business in the supply chain or directly to the final consumer. However, personal end costumers of products and services are not able to recover VAT on purchase.

Value added tax was imposed because it creates stronger incentives to collect than a sales tax.

Principle of VAT

The standard method to carry out value added tax includes an assumption of a business which owes some percentage on the price of the product minus all taxes paid earlier on goods. For example if the value added tax rate is 10% then an orange juice maker would have to pay 10% of the Rs 5 per liter price minus taxes paid earlier (let us assume Rs 0.20). Now as per this example, the juice maker is liable for paying Rs 0.30 tax.

Calculation of value added tax

  • The easiest way to calculate the value added tax on a purchase is to multiply the price of the item by the rate of the VAT and added to the price of item. For example, if you are in Britain and you wish to buy a sweater for a 100 pounds, and the vat is 18 percent then the VAT will be

VAT = 100 pounds x 18 / 100 = 18 pounds.

Total price paid = (100 + 18) pounds = 118 pounds

  • Value added tax can be gained by combining price and VAT also. It can be calculated by multiplying the price of the product by 1 + rate of value added tax. Considering the previous situation once again, you can calculate the VAT as

VAT = 100 pounds x (1 + 18 / 100) = 118 pounds

  • Vat can be calculated from total price also. You can work backwards to find out value added tax from total price. Again considering the previous situation, you can take the final cost of the product i.e. 118 pounds and divide it by 1+ VAT rate i.e. 18%.

VAT = 118 pounds / (1 + 18 /100) = 18 pounds.

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How to Calculate Variable Cost

Variable costs are those expenses which change in proportion to the activity of business. The total sum of marginal costs for overall units produced is called the variable cost. It is important to know how to calculate variable cost and this article will give you the steps for its calculation.

Fixed cost and variable cost are two component of the total cost. Direct costs can easily be associated with a particular cost object. However, all variable costs are not direct costs. For example, variable manufacturing overhead costs are those variable costs which are indirect costs. Sometimes variable costs are called unit level costs as they vary with the number of unit produced.

For example, let’s take raw materials and its packaging. If you wish to get more output then you have to give more input and you have to buy more packaging to distribute your product. To find out the variable cost, you need to add up each variable cost in your production. If you want to run a business, you must know the variable cost per unit of each good produced.

Steps to calculate variable cost

  • Find out the list of your variable costs and determine the time period for which you want to do the calculation. For example, assume you are managing a production plant which has the cost of direct labor (workers working in plant), raw materials and packaging materials. You have to look at the variable cost each month.
  • Compute the price of each of your variable costs. The prices of your variable costs are their prices. In the same example, let us assume the wages paid for direct labor are Rs 1000, the price paid for packaging is RS 1000 and raw materials are of Rs 1000.
  • Add each variable cost.

Rs (1000 + 1000 + 1000) = Rs 3000

Rs 3000 is your total variable cost for the month.

  • The variable costs of the time period taken earlier should be divided by the total number of products produced during the period. Let us assume that the total number of products produced is 10000 and each of the variable cost is Rs 1000 here so Rs 1000 / Rs 10000 = 0.10.
  • Now you can see here that each variable cost contributes 10 paisa to every rupee of your total per unit cost. In total, variable costs contribute for 10 paisa for each rupee you spend.

This calculation is used in break even analysis which is used to measure the profitability of a business.

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How to Calculate the GDP

The development of any country hugely depends upon its ‘gross domestic product’ that is its GDP. The GDP is also known as GDI that is ‘gross domestic income’. To evaluate a country’s development, it is necessary to calculate the GDP of that nation. Before learning how to calculate the GDP of a nation it is necessary to know what exactly GDP is.

GDP or GDI is that amount of goods or services which is produced every year in the country. The market value of all the goods produced inside the borders of a country in a year is called the gross domestic product.

The GDP of a nation can be determined in 3 ways. It is necessary for each of the method to show the same result. Those three methods are:

  • The product (output) approach
  • The income approach &
  • The expenditure approach.

Product approach

The simplest of the three methods is the product approach. In this method, the outputs of every class of enterprise are added to arrive at the total.

Income approach

In this method, the incomes that the firms pay households for the factors of production they hire like wages for labor, interest for capital and rent for the land and profits entrepreneurship are added to measure GDP.

Incomes are divided into 5 categories by The US “National Income and Expenditure Accounts”. These five categories are:

  • Wages, salaries and supplementary labor income
  • Interests and miscellaneous investment income
  • Farmer’s income
  • Corporate profits
  • Income from non farm unincorporated business

These are five categories in which The US “National Income and Expenditure Accounts” divides the income. At factor costs, these five components add up to net domestic income.

You have to make two adjustments to get the GDP. These adjustments are as follows:

  1. Deduct subsidies from indirect taxes and add to market prices to get factor cost.
  2. Capital consumption or depreciation is added to get gross domestic product to get net domestic products.

Expenditure approach

When we measure the total expenditure of money we have used to buy things, it is actually a way to measure production. This method of determining the GDP is called the expenditure approach. Here it is to be noted that if you produce a thing for yourself then it is production but it won’t be counted in GDP because it is not going to be sold. For example, if you have sewed a dress for you, it would be considered as production but it would not be count in GDP because it would never be sold.

Hence, we can understand how expenditure approach works to determine GDP.

The equation for GDP in expenditure method is

Y = C + I + G + (X – M)

Where

Y = GDP

C = consumption

I = investments

G = government spending

(X – M) = net exports

Steps to calculate GDP

  1. 1. First you have to understand the difference between GDP and GNP. GNP is actually the gross national product. The difference between these two is very simple. GDP stands for all the products and services produced within the border of a country but GNP include all those products which are produced by the citizen of that country staying anywhere in the world.
  2. 2. Add consumption, government expenditures, investments and net exports, which means exports excluding imports to find out GDP.
  3. 3. After that compare GDP. GDP is compared in constant dollars.

Calculating GDP of a country is not very tough but you need to have correct data for correct calculation.

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How to Calculate Terminal Value

Terminal value of a security is defined as the present value at a future point in time of the future cash flows when stable growth rate is expected forever. In simpler words, terminal value is the evaluation of what an investment will be valued in future. The calculation of terminal value is very simple. By using a very simple formula given in this article, you will be able to easily calculate the value of the stock or share for a specific duration, rather than calculating it yearly. Read more to know about how to calculate terminal value.

Steps for calculation:

  • Determine the interest rate of the investment, you have made. For example, let us take an interest rate of 5% annually. It should be converted into decimal. Here, 5% would be converted into 0.05.
  • Add 1 to the interest rate. As per our example, here, 1 would be added to 0.05, making it 1.05. Here, it will be called as ‘i’ standing for interest.
  • Find out the duration of the investment. Let us assume that we are computing the terminal value at 10 years in future. Here it will be called as ‘y’ standing for years.
  • Now ‘i’ should be calculated to the ‘y’th power. As per our example, i = 1.05 &

y = 10.

Therefore, 1.0510 ≈ 1.628. This will be called as ‘A’.

  • The principal investment will be multiplied A times. For example, let us assume that the investment is of Rs. 1,000 at 5% annual interest rate for 10 yrs. Now multiply the investment that is Rs 1000 to A that is 1.628. It will give a sum of Rs 1, 628.89.
  • This final result is the terminal value of the investment you have made.

Tips

  • The terminal value allows the inclusion of the value of future cash flows. It is normally used in multi stage discounted cash flow analysis.
  • The exact future situation of the investment cannot be identified for sure.
  • The terminal value is an estimate only, which is almost accurate and used widely.
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How to Calculate Surface Area of Cylinder

Before knowing how to calculate surface area of cylinder, let us know what a cylinder is. A cylinder is said to be a three dimensional object that has two bases separated by a finite distance. The surface of a cylinder is formed by the points at a fixed distance from the axis of the cylinder.

The total surface area of a cylinder is calculated as the sum of the surface area of the top and bottom of the cylinder and the surface area of the circular surface of the cylinder. The formula for calculating surface area of the cylinder is given as below,

As the top and bottom of the cylinder are the circular surfaces of equal dimensions, surface area of the top and bottom of the cylinder are given by the formula,

Area of top of the cylinder = π r2

Area of bottom of the cylinder = π r2

Adding both these areas we get,

Area of bases of a cylinder = 2 π r2

Area of the lateral surface or curved surface of a cylinder is given as,

Curved surface area of a cylinder = 2 π r h

Therefore,

Total surface area of a cylinder = Area of both the bases of the cylinder + Curved surface area of a cylinder

Total surface area of a cylinder = 2 π r2 + 2 π r h

Total surface area of a cylinder = 2 π r (r + h)

In the above formula,

  • “π” is a constant(value of π = 3.14 or 22/7)
  • “r” is the radius of base of the cylinder
  • “h” is the height of the cylinder

Area of a cylinder is expressed in square units.

  • To calculate area of a cylinder you will have to know the measures of the base and the height of the cylinder. You need not calculate the area of the bases and curved surface area separately; instead use the simplified formula that is given in bold case above.

Example:

Calculate the surface area of a sphere whose radius and height are 4.5 and 6.6 centimeters respectively.

Given that,

Radius = 4.5 cm

Height = 6.6 cm

Therefore,

Surface area of a cylinder = 2 π r (r + h)

Surface area of a cylinder = 2 × 3.14 × 4.5 × (4.5 + 6.6)

Hence,

Surface area of a cylinder = 313.686 cm2

If radius and height are given in different units then first convert them into compatible units. If you don’t know the conversion factors between different units then you can take help of online sources for this.

Area of cylinder can also be calculated using online calculators. They are very easy to use and display results within fraction of second when you enter the values of required fields in the text boxes and click on the calculate button.

Practice problems:

  1. Calculate curved surface area and total surface area of a cylinder whose radius is 12 m and height is 34.44 m.
  2. Calculate total surface area of a cylinder whose volume is 145.5 cm3 and height is 34 cm.( Volume of a cylinder = π r2)
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How to Calculate Surface Area of a Sphere

A sphere is a spherical solid object. A sphere is made up of many equidistant points from the center where the entire mass of the sphere is supposed to be concentrated. This article on how to calculate surface area of a sphere will help you in calculating surface area of a sphere using easy steps.

The formula for calculating surface area of a sphere is given as follows:

Surface area of a sphere = 4 π r2

In the above formula,

  • “r” is the radius of the sphere
  • “π” is a constant with value 3.14 or 22/7

Surface area of a sphere is usually expressed in square units as generally we express the surface area of any geometrical objects.

  • From the above formula it can be clearly seen that volume of a sphere is twice the area of the circle.
  • To calculate the surface area of a sphere you need to calculate the radius of the sphere and place this value in the above formula and perform necessary calculations.
  • If you are already given the value of the radius of the sphere you can use it directly in the above formula.
  • You can also use the above formula to find out the measurement of radius of the sphere if you know the surface area of the sphere.
  • You may have to use conversion factors in some of the cases to convert the answers in required field. These conversion factors are available online.

Example:

Suppose radius of a sphere is 3 cm. Find its surface area.

Surface area of a sphere = 4 π r2

= 4 × 3.14 × 32

= 113.04 cm2

Therefore, the surface area of a sphere of radius 3 cm is 113.04 cm2.

Practice Problems:

  • Calculate surface area of a sphere in meters whose radius is 4.5 cm.
  • Calculate surface area of a sphere whose radius is 77 cm.
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