The Benefits of Using an Income Calculation Worksheet

Written By: NAMP® Op-Ed Ghost Writer

Most underwriters and processors have the basics of calculating income down to a science. The hourly, bi-weekly, semi-monthly, and annual calculations are second nature to those of us who calculate income every day. As a result, many processors and underwriters will manually execute their calculations on an underwriting or processing worksheet. Many underwriters will also type their calculation on their underwriting transmittal. However, there are some drawbacks to manual calculations that an income calculation worksheet can overcome. 

The best software program to draft an income calculation worksheet on is Microsoft Excel or another equivalent. Excel allows users to build formulas into their worksheets which will net the correct income calculation every time. The formulas within cells can be locked to prevent inadvertent corruption of the formulas. This greatly reduces the margin for error and creates a uniform presentation of income calculation methods to sales partners, quality control, and investors. 

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In addition, the worksheet allows the underwriter to execute multiple calculations on each income type in an efficient and timely manner. The underwriter can execute the hourly or salary calculation. They can also execute year-to-date and previous years’ averages to determine if the base wage calculation is supported. The same principle applies when reviewing overtime, bonus, commission, and tip income. When multiple income calculations are built into the worksheet, the underwriter has a clear and easy way to analyze income trends. 

The income calculation should also include an area to average Schedule A / Form 2106 unreimbursed expenses. This allows the underwriter to demonstrate the monthly figure that is used to reduce the monthly base salary. It can also help investors and quality control professionals understand why the base salary is lower than the pay stubs or verification of employment might indicate.

About The Author

All of NAMP® staff writers are veteran mortgage processing & underwriting instructors for Mortgage Underwriter University ( They have each conducted numerous mortgage processing & underwriting training classes and have worked in the mortgage banking industry for 25+ years. If you're interested in becoming a writer for NAMP®, please email us at:

Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.