Pre-Tax Income and Tax Liability
Pretax income, also known as earnings before tax or pretax earnings, is the net income earned by a business before taxes are subtracted/accounted for. Pretax income, however, accounts for deductions related to operating expenses, depreciation, and interest expenses.
How do I calculate my annual pre-tax income?
How To Calculate Income Before Taxes
- Net income – deductions = gross income.
- Monthly paycheck amount x 12 = gross annual income.
- Weekly paycheck amount x 52 = gross annual income.
- Hours worked during a year x hourly rate = gross annual income.
- $50,000 + $60,000 + $5,000 = $115,000.