As you know, for all properties in Oregon and California, there are three (3) calculations that you are required to do on the Income Worksheet for employment income:
- Per Employment Verification
- Per Highest Paystub
- Per YTD Annualized Income
1.For the first calculation (Per Employment Verification), simply take the hourly rate and number of hours worked from the Employment Verification and annualize. I have attached a sample Employment Verification which is used for the purpose of this calculation:
Regular $13.26 x 40 x 52 = $27,580.80
OT $19.89 x 2 x 52 = $2,068.56
Commissions $150 x 4 = $600.00
Total $27,580.80 + $2,068.56 + $600.00 = $30,249.36
2. For the second calculation (Per Highest Paystub), you will take the highest paystub and annualize UNLESS the highest paystub only occurred once in the last 3 months – if that is the case, use the second highest paystub. (Note: Idaho properties, you will only obtain the Employment Verification or paystubs, not both). Let’s assume the following:
Sarah Smith received the following total gross amounts from her employer and is paid bi-weekly:
5/24/13 $1,124.19
5/10/13 $1,089.76
4/26/13 $1,103.27
4/12/13 $1,071.43
3/29/13 $1,065.89
3/15/13 $1,092.11
3/01/13 $1,118.66
2/15/13 $1,087.32
Since Sarah earned over $1,100 three (3) times in the last three (3) months, we will actually use the highest amount to calculate income – in this case, $1124.19. Therefore:
$1124.19 x 26 = $29,228.94
3.For the third calculation (Per YTD Annualized Income), look at the gross YTD on the most current paystub OR the YTD on the Employment Verification – whichever is higher – then determine the number of weeks included in the YTD amount and annualize. For example, let’s assume the YTD amount on Sarah’s attached Employment Verification is higher than what is on her current paystub and use that amount ($12,487.19).
To calculate the number of weeks included in the above YTD amount (1/1/13 – 5/28/13 according to the attached), take the number of days in each month included in the YTD amount and divide by 7:
January 31 days
February 28 days
March 31 days
April 30 days
May 28 days (since the YTD amount on the EV indicates she was paid through 5/28/13)
Total 148 days
148 days / 7 = 21.15 weeks
Therefore: $12,487.19 / 21.15 weeks x 52 weeks = $30,701.32
After calculating all three (3) income calculations – with the exception of Idaho properties – reflect the most conservative on the Tenant Income Certification. In this case, $30,701.32.
Should you have any questions, please do not hesitate to contact the Compliance Department.