Using Excel to Calculate Your Annual Salary With Increases

By Motley Fool

If you have a recent pay stub, you can use Microsoft Excel to calculate your annual salary, as well as estimate how much a raise will affect your paychecks. Here are the steps to calculate yours.

How to calculate your annual salary Locate your gross pay on your pay stub, which is the amount you got paid before any taxes or other deductions come out. If you received any out-of-the-ordinary income during the period, such as a bonus or overtime, deduct this amount.

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On a blank Excel spreadsheet, enter this amount in the top right cell (A1). (Note: You don't need to label your cells, as shown in the screenshots, but it may make the process easier and more organized if you do.)

In the cell underneath this (A2), multiply by the appropriate factor, depending on how many times per year you get paid. For example, if you get paid biweekly, you'll multiply by 26. In the cell, write (=A1 * 26), or the appropriate multiple. This will calculate your annual salary.

Calculating salary increases If you anticipate getting a raise and want to see how it may affect your salary, you can do this fairly easily. Here are two processes, depending on whether your raise is a fixed dollar amount (such as $1,500), or a percentage of your salary (such as 3%).

First, if you expect a fixed amount, enter the amount in cell A3, just below your annual salary. In cell A4, enter (=A2 + A3), which will result in your post-raise salary.

If your raise is a percentage of your salary, you'll need to use an extra line. In cell A3, enter the percentage of your raise in decimal form -- so a 3% raise becomes 0.03. Then, in cell A4, enter (=A2*A3). This will give you the amount of your raise. In cell A5, enter A2+A4 to arrive at your post-raise salary.

Finally, to see how your raise might affect your paychecks, simply divide by the number of paychecks per year in the cell below your salary calculation. To see how much of a difference this could make in your paycheck, subtract your current paycheck amount from the new amount you calculated.

Here's what the process might look like from start to finish:

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