Whether you're pondering the "minimum salary requirement" question on a job application or an entrepreneur trying to determine how much to pay yourself, you may struggle if you don't know how to accurately assess your salary requirements. Balancing expenses, taxes and take-home money can be difficult, but with a few calculations you'll be able to determine approximately how much money you need to live on.

## Estimate Your Expenses

Make a list of your monthly costs and determine how much you spend on each. Include rent or mortgage, car payments, utilities, food, shopping, entertainment, gas, and child care. Use bills and receipts from previous months to help with the estimate.

Add up all of the costs identified to determine approximately how much money you spend each month.

Determine how much money you need to save each month and add it to your expense total. Be sure to include savings for large purchases, vacations, holiday spending and education. This amount will represent your monthly estimated expenses.

## Estimate Your Deductions

Make a list of each of the monthly payroll deductions that you will incur. Be sure to include health, dental and vision insurance, life insurance, 401k and other retirement savings.

Calculate how much your deductions add up to monthly.

Add this amount to the value obtained for your monthly estimated expenses.

Multiply the combined amount of your monthly estimated expenses and deductions by 12 to determine your total annual expenses.

Determine the percentage of your paycheck that you will take home after taxes. To determine your taxes, take into account Social Security and Medicare, which is 7.65 percent for salaried employees, and your state and federal taxes. Use a tax bracket calculator to obtain an accurate estimate. Subtract the percent that is taxed from 100 percent to determine your take-home percentage. For example, if 25 percenet of your paycheck goes to taxes, you take home 75 percent of your paycheck.

Divide your total annual expenses by the fraction that you take home after taxes. For example, if you found that you need $45,000 a year and your take-home amount after taxes is 75 percent, divide $45,000 by .75 to get $60,000. This is your estimated minimum salary requirement.

#### Tip

- If you aren't sure about some of your expenses, talk to an accountant or other professional to help you estimate your salary requirements. Use online tools or a tax professional to help you determine the portion of your salary that goes to taxes. Bear in mind that the estimate that you maintain is a minimum salary estimate, and doesn't take into account unexpected or emergency expenses.

#### Warning

- When making estimates, be sure to make them higher rather than lower so that the value you obtain will cover all of your expenses.

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