CONTRACT INCOME (MAM)

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A yearly wage which, by contract, is paid during and intended to cover a specific work period of 12 months or less. Contract income is usually received for a period of 9, 10, or 11 months in a 12-month period. However, the income is considered available to the individual for the whole 12-months covered by the contract.

To manually compute the monthly wage, divide the yearly wage by 12.

Treatment: Earned Income

Example

An individual works 9 months of the year in an elementary school. The individual receives a $12,000 yearly salary. His salary is paid to him during the 9 months he works. Determine his monthly wage by dividing his yearly salary by 12.

$12,000 divided by 12 equals $1,000 per month in countable earned income.