Paycheck calculator › Documents › Income calculation worksheet: qualifying monthly income from stubs and W-2s, the way underwriting reads it
Income calculation worksheet: qualifying monthly income from stubs and W-2s, the way underwriting reads it
Every wage-earner file needs the same calculation: monthly base from the stated pay, checked against year-to-date; variable income averaged over 24 months and not averaged up when it is falling; a total that will survive the underwriter. This worksheet does the arithmetic, flags the inconsistencies (YTD running below stated pay, a prior year that doesn't support the current rate, a declining bonus trend) and prints a one-page summary for the file. Unlimited worksheets for $29 a month; single worksheets work with the 10-document pack. For self-employed borrowers use the bank-statement income calculator.
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Method
- Base: salary ÷ 12, or hourly × weekly hours × 52 ÷ 12. YTD base ÷ months elapsed must be consistent; if it runs lower, the lower figure is used and the gap should be explained (unpaid leave, a mid-year raise).
- Variable: (YTD + prior year) ÷ (months elapsed + 12). If the prior year fell more than 10% from the year before, or YTD is pacing below the prior year, the trend is flagged and the lower of YTD-monthly and the 24-month average is used.
- Total: base used + variable used = qualifying monthly income.
The worksheet follows the usual agency approach (Fannie Mae Form 1084-style logic for wage earners); the lender's guidelines and AUS findings govern. It is a calculation aid, not a verification — the stubs, W-2s and VOE remain the evidence.
Frequently asked
Can I use it for two employers?
Run one worksheet per employer and add the totals; each employment must meet its own history requirement.
Bonus paid once a year?
Use the annual figures: prior year bonus ÷ 12 and the year before, with YTD 0 until it is paid; the trend check still applies.
Part-time or second job income?
Same method, with a two-year history required for a second job in most guidelines.