Updated for 2025 • SelfEmployedDocs

How to Calculate Self-Employed Income (Simple 2025 Method)

Calculating your self-employed income shouldn’t feel like doing your taxes in the dark. Whether you drive for DoorDash, run a small side business, do freelance work, or get paid cash, the math is simpler than you think.

This guide breaks it down using a clean, repeatable method lenders actually understand.

Quick answer:
To calculate your self-employed income, total your earnings for the last 2–3 months, subtract your business expenses (if needed), and divide by the number of weeks or months to find your average. This average becomes your “official” income.

Why you need to calculate your self-employed income correctly

Your income number is used for:

apartment applications
car loans
credit cards
government programs
personal loans
creating a pay stub

And here’s the part most people miss:

Real talk:
Lenders don’t need your exact earnings — they just need a believable average.

The Simple 3-Step Method (2025)

Step 1 — Add up your total income

Include money from:

cash jobs
gig apps (DoorDash, Uber, Instacart, etc.)
freelance invoices
Zelle / Cash App / Venmo payments
client payments

If it came from work — count it.

Step 2 — Subtract any business expenses (optional)

You only need to do this if the person reviewing your income expects a net income number (mostly for mortgages).

Examples of expenses:

gas
supplies
software
equipment

For rentals and car loans, you usually do not need to subtract expenses. Use the straight income amount.

Step 3 — Calculate your average income

This is what lenders actually look at.

Use this formula:

Your Average Income = Total Income ÷ Number of Months

If you want a weekly number:

Weekly Income = Total Income ÷ Number of Weeks

That’s it. Nothing fancy. Nothing complicated.

Real example (simple numbers)

Let’s say you earned:

$3,200 in January
$2,800 in February
$3,000 in March

Total = $9,000 in three months

Average monthly income:

$9,000 ÷ 3 = $3,000/month

If you want weekly:

$9,000 ÷ 12 weeks = $750/week

That’s the number you would use on a pay stub or income letter.

What to include as “income” when calculating self-employed earnings

Gig app payouts
Cash deposits
Zelle/Venmo/Cash App client payments
Freelance invoices
Tips
Small jobs or side hustles

If you earned it through work — and you can document it — it counts.

What NOT to include

gifts
loans
transfers between your own accounts
refunds or reimbursements
one-time random money

Lenders only want to see your work income — not your financial life story.

How to use your calculated income

Once you have your average weekly or monthly income, you can use it to create:

a self-employed pay stub
a self-employed income letter
a simple profit & loss statement

The most powerful one — the one lenders look at first — is the pay stub.

Want a clean pay stub using your calculated income?

Create a professional self-employed pay stub in minutes. Just enter your income and download the PDF instantly.

Generate My Pay Stub →

How far back should you calculate your income?

This depends on what you’re applying for:

Apartments: 2–3 months
Car loans: 1–3 months
Small loans: 1–2 months
Mortgages: sometimes 12–24 months

But for everyday applications, 2–3 months is ideal.

FAQ: Calculating Self-Employed Income

How do I calculate self-employment income if I get paid cash?

Add up your cash earnings, deposit them consistently, and use the average weekly or monthly amount. Cash income counts as long as it’s real and documented.

Is average income acceptable for pay stubs?

Yes — averaging your income is the standard method lenders use to evaluate self-employed income.

Does my income have to be perfect every month?

Not at all. Most self-employed people have fluctuations. Lenders expect this and look at your average.

Can I use this method for loans and rentals?

Absolutely. This is the preferred method for apartments, car loans, and many smaller loans.

Need help turning your income into clean documentation? Start on the homepage, generate a self-employed pay stub, or visit the About and Contact pages.