People who work in a company mostly need to **make a salary sheet** to calculate the salary of employees. In **Microsoft Excel **we can calculate the monthly salary sheet very easily just by using some simple formulas. In this article, I am explaining how to calculate monthly salary in excel.

## Download Practice Workbook

Download this practice workbook to exercise while you are reading this article.

## 3 Quick Steps to Calculate Monthly Salary in Excel

In the following article, I have shared 3 quick steps to calculate monthly salary in excel.

Suppose we have a dataset of some **Employee Name**, **Basic Salary of employees**, and **Total Working Days**. Now we are going to calculate the monthly salary in an excel sheet.

### Step 1: Determine Gross Salary for Each Employee

In this step firstly we will make the payment parts where we will calculate all the payments that need to be paid. With **basic salary**, there are some allowances paid by the company.

In the following screenshot, you will find some new columns where allowances-**Conveyance**, **House Rent**, **Medical **will be calculated according to the company’s terms and conditions. After that, we will **calculate the Gross Salary**.

- Select a
**cell**(**E7**) to calculate conveyance in the chosen cell. - Apply the formula-

`=IF(C7>=8000,C7*3%,C7*2%)`

Where,

**(C7>=8000,C7*3%,C7*2%)**stands for the company’s term. The term is if an employee’s salary is equal to or more than**$8000**, he/she will get**3%**of conveyance, otherwise, he/she will get**2%.**

- Press
**Enter**and drag down the “**fill****handle**” to fill.

- Here we have calculated the conveyance payments for all employees.

- Now, we will calculate the
**house rent allowance**. - Choose a
**cell**. Here I have selected**cell**(**F7**) to apply the formula. - Put the formula down-

`=IF(C7>=8000,C7*10%,C7*8%)`

- Hit the
**Enter**button and then drag it down to fill all the cells.

- Here we have house rent calculated for all the employees.

- To calculate the medical allowances select a cell and apply the formula to the cell. Here I have chosen
**cell**(**G7**). - Write the following formula-

`=IF(C7>=8000, C7*4%,C7*3%)`

- Click the
**Enter**button to continue. - Pull the “
**fill****handle**” down to get the output.

- Now we have calculated the output of medical allowances.

- Finally we can calculate the total gross salary. To do so we will sum all the allowances and then sum with the total working days to get the value.
- Choose a
**cell**(**H7**) and apply the following formula-

`=SUM(E7:G7)+C7/31*D7`

- Hit the
**Enter**button and drag it down to get all the employee’s gross salary.

- So, we have finished and got our values in our gross salary column representing the amount an employee will be paid.

**Read More: How to Create a Monthly Salary Sheet Format in Excel (with Easy Steps)**

**Similar Readings**

**How to Create Tally Salary Slip Format in Excel (With Easy Steps)****Calculate Bonus on Salary in Excel (7 Suitable Methods)****How to calculate salary increase percentage in Excel [Free Template]**

### Step 2: Perform Necessary Deduction from Gross Salary

This time we will calculate the deduction from the gross salary to calculate the monthly salary in excel.

Here we have created some new columns which will represent **Income Tax**, **Provident Fund **(**PF**), and **Total Deduction**.

- According to terms
**income tax**is**5%**whose salary is over or equal to**$9000**. - To get the output according to the terms choose a cell to apply the formula. I have chosen
**cell**(**I7**). - Write the formula down-

`=IF(H7>=9000,H7*1.5%,0)`

- Press
**Enter**and pull the “**fill****handle**” down.

- Now we have income tax values in our hand which will be deducted from the gross salary.

- To calculate the provident fund select a
**cell**(**J7**) and write the formula down-

`=H7*5%`

- Click
**Enter**and drag down the “**fill****handle**” to fill with precious output.

- We have calculated provident fund values for all the employees.

Now let’s sum the income tax and provident fund to get the total deduction value.

- Choose a
**cell**(**K7**). - Apply the formula-

`=SUM(I7:J7)`

- Press
**Enter**and fill the cells pulling the “**fill****handle**” down.

- Here we have total deduction values.

**Read More: How to Create Salary Slip Format with Formula in Excel Sheet**

### Step 3: Calculate the Monthly Net Salary

It’s time for the final part to calculate the monthly net salary which will be actually paid after the end of the month.

- Select a
**cell**(**L7**) and put the following formula down-

`=H7-K7`

- Hit the
**Enter**button and drag the “**fill****handle**” down.

- Finally, we have our desired output where we got the output by subtracting the deduction amount from the gross salary.

- After all the steps are completed our final table will look like this.

## Things to Remember

- Sometimes a term might come for some employees’
**advanced salary**. Just open a new worksheet and attach the values in the deduction part using**the VLOOKUP function**.

## Conclusion

In this article, I have tried to cover all the simple methods to calculate monthly salary in excel. Take a tour of the practice workbook and download the file to practice by yourself. Hope you find it useful. Please inform us in the comment section about your experience. We, the **Exceldemy** team, are always responsive to your queries. Stay tuned and keep learning.