How are year-to-date earnings calculated?
What is the difference between year-to-date earnings and annual earnings?
How can employees use their year-to-date earnings to estimate their annual income?
Year-to-Date (YTD) Earnings
Year-to-date (YTD) earnings refer to a company's or an employee's total income before taxes or deductions from the beginning of the year to the current pay period.
How are year-to-date earnings calculated?
To calculate YTD earnings, employers add together all gross earnings from January 1 to the current date, including wages and other compensation. For example, if an employee earns $5,000 per month through June, and received a $2,000 commission in February, the total YTD earnings would be $32,000 (6 x $5,000 + $2,000).
What is the difference between year-to-date earnings and annual earnings?
Year-to-date earnings show total gross earnings up to a specific date. They are often used to make comparisons and short-term adjustments. Annual earnings usually cover the entire calendar year ending on December 31. They inform long-term financial planning decisions.
How can employees use their year-to-date earnings to estimate their annual income?
Employees can estimate their annual income by dividing their YTD earnings on the pay stub by the number of months worked, then multiplying that figure by 12. This estimation helps with personal budgeting and tax planning. However, it doesn't account for seasonal variations and occasional overtime pay or bonuses.
Dive Deeper with Justworks’ Resources
Get a closer read on relevant topics related to benefits, payroll, HR, compliance, and more.
