income is described as all the money you earn
this can include your military pay
annuities or paycheck from a second job
as you transition
it is important for you to fully
understand your current income
with all the compensation and benefits
so this can be translated into a civilian equivalent
consider this scenario
meet married couple Tayo and Tami
Tayo has recently separated from the military
and they're looking at his first civilian paste up
I don't get it says Tayo
what happened
questions Tami
I thought my paycheck was going to be 2300 bucks
but it's actually only 1886
looks like something
unexpected has impacted Tammy and Tayo's budget
by $414 did Tayo do his math wrong
he was told by his new employer that he would be making
59 thousand eight hundred dollars a year
he took that figure and divided it by 52
then noting a bi weekly pay period
multiplied the resulting 1150 dollars times two
what tail may not have factored in though
are the several things which can make your
take home pay a bit
different from your expected annual income
in this lesson
we'll look at
different factors that should be considered
when calculating your income
and how taxes can change that number
there are two common terms used when discussing
gross income is everything
owed to you from your employer
total pay plus allowances
net income is what remains after taxes
Social Security insurance premiums
retirement contributions
and involuntary allotments
for garnishments and child support
have been deducted
you can think of net income as the amount of money you
take home
from each paycheck
note that gross income for
National Guard and reservists may be calculated
somewhat differently
click on the
National Guard and reservists button to learn more
during transition
it is important to
understand your current
Les to fully comprehend what aspects of your income
may change after transition
your gross income is the total at the bottom of the
entitlements box
after deductions
and allotments are removed from your paycheck
the amount remaining is your net income
but this may not be your only source of income
consider if you have a second job
your spouse has an income
and if you have an income from an annuity
child support or alimony
when determining your income
it is important to include all sources available
for those in the Coast Guard
your pay slip is slightly different
click on the button to show a Coast Guard pay slip
and where to find your gross income and net pay
open the Spending Plan
and click on the income tab at the bottom
in this tab
there are columns for current income and potential
for right now we are interested in the current column
use the information from your
Les to complete the information under the current
column and be sure to add the base pay
into the row marked for
base pay the annual will be automatically calculated
continue
further down the spreadsheet and input entitlements
allotments
and deductions into the appropriate locations
the amount you will need to make
in a civilian job to have the same take home pay
as you earn currently in the military is called the
civilian salary equivalent
one way to determine your civilian salary equivalent
is to use the Regular Military Compensation
or RMC calculator
on the department of Defense's RMC calculator website
let's use the RMC calculator now
click the link on the screen to go to the calculator
once you've opened the calculator fill it out
add your rate or rank when your transition will occur
select your tax filing
it is either single
married filing jointly
married filing separately or head of household
add your family size
as noted on the website
your family size includes you
plus any other individuals living with you
indicate if you are living OCONUS or not receiving bah
if you select yes
you will be asked to answer whether you are living
OCONUS
if you select no
you will be asked to
enter the zip code of where you are
currently living
or where you plan to relocate
click Calculate RMC
your total RMC will be shown here
write the amount in your spending plan here
if you are a retiree
you should be aware of what's called the retiree pay
gap when calculating your civilian salary equivalent
click on the Retiree Pay Gap button to learn more
if you know the total amount of money you'll need
to maintain your lifestyle
you can determine your retiree pay gap
this gap is the salary you'll need from a civilian job
or other sources to supplement your retiree paycheck
and possible disability pay
click the link on the bottom of the screen
to calculate an
estimate of this gap
select the best answer for this question
select the best answer for this question
taxes are one of the most important changes to
understand as you transition
as we discussed in the income section of the training
military pay included allotments and entitlements
which are not taxable