18 June 2022 0:09

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

  1. Net income – deductions = gross income.
  2. Monthly paycheck amount x 12 = gross annual income.
  3. Weekly paycheck amount x 52 = gross annual income.
  4. Hours worked during a year x hourly rate = gross annual income.
  5. $50,000 + $60,000 + $5,000 = $115,000.