If you want to know how close you are to the benefits cliff, you need to know your MAGI — your Modified Adjusted Gross Income. And the fastest way to figure that out is to look at your pay stub.
The problem: pay stubs don't say "MAGI" anywhere. They use their own terminology, and the number you need isn't always obvious. This article translates the pay stub into plain language so you can find your MAGI quickly.
Start with gross income — not net
The most important thing to understand: benefits programs use your gross income, not your take-home pay. Your net pay (what you actually receive in your bank account) is after taxes and deductions have been taken out. That's not what Medi-Cal looks at.
Find the line on your pay stub that says "Gross Pay," "Gross Earnings," or just the total earnings before any deductions. That's your starting point.
The key lines on a typical pay stub
Gross Pay / Total Earnings — your income before anything is taken out. This is what programs start with.
Federal Income Tax, State Tax, Social Security, Medicare — these are taxes taken out. They reduce your take-home but do NOT reduce your MAGI.
401(k) / Traditional IRA / 403(b) — if your employer takes these out pre-tax, they DO reduce your MAGI. This is the line you want to grow.
Health Insurance Premium — employer-sponsored health insurance premiums paid pre-tax also reduce your MAGI.
FSA / HSA contribution — pre-tax health spending account contributions also reduce your MAGI.
Net Pay — what hits your bank account. Not relevant for MAGI calculation.
The MAGI formula from your pay stub
Here's the simple version:
MAGI ≈
Gross Pay
minus Pre-tax 401(k)/Traditional IRA contributions
minus Pre-tax health insurance premiums
minus Pre-tax FSA/HSA contributions
= Your approximate MAGI
This is an approximation — your actual MAGI is calculated on your tax return using Schedule 1 adjustments. But for the purposes of estimating your benefits eligibility throughout the year, this calculation from your pay stub gets you very close.
Converting your pay stub to annual income
Benefits thresholds are expressed as annual numbers. To convert your pay stub to annual:
- Weekly pay stub: multiply gross pay by 52
- Every 2 weeks: multiply by 26
- Twice a month: multiply by 24
- Monthly: multiply by 12
- Hourly: multiply your hourly rate by your hours per week, then by 52
Enter your annual gross income and your pre-tax deductions
Once you've calculated your annual gross and identified your pre-tax deductions, enter your gross income into the benefits cliff calculator and use the retirement slider to see how adjusting your 401(k) or IRA contribution changes your MAGI and your benefits eligibility.
What if you have multiple jobs or gig income?
Add up the gross income from all sources. For gig work where you receive a 1099 or cash, your "gross income" is everything you earned before any expenses. Your net self-employment income (after business expenses) is what counts toward MAGI — covered in detail in our gig worker taxes article.
Enter your numbers in the calculator
Once you've found your gross pay from your pay stub, plug it into the calculator along with your pay frequency to see where you stand.
Open the calculator →