When people refer to a salary, they often talk in terms of an annual amount. In this context, salary can be a very objective term since the method for calculating an annual salary can also be used for hourly work. By the same token, you can also use a salaried number to calculate how much you make per hour.
The Information You Will Need
To calculate your annual salary, you will need to know the hours you worked for the year and your pay rate per hour. In some cases, people on salary already know how much they made for the year because their pay is based on an annual number. For example, a salaried retail manager might make $50,000.00 for the year, but the number of hours worked would vary from week to week.
Calculating Your Annual Salary
To calculate your annual salary, you would multiply the number of hours you worked for the year by your rate per hour. An example would be:
2,000 hours worked for the year X $15.00 per hour = $30,000.00 for the year
You can compare your calculation with the annual salary number found on your W-2. If you find that your number and the W-2 number do not match, then you should speak to your human resources or payroll department.
Calculating Your Hourly Pay
If you are a salaried person who makes a set salary per year, you might want to know what your hourly pay is for the sake of comparison. Even though you are salaried, knowing your hourly pay could help when you decide to re-negotiate your pay with your employer.
Since salaried people often do not submit hourly time sheets to their companies, you will have to track your hours on your own. Once you have your hours for the year, you would divide your salary by the hours worked to get your hourly pay. An example would be:
$50,000.00 per year salary / 2,340 hours worked for the year = $21.37 per hour
Salary Per Month
If you are filling out an application for an apartment or for a car loan, you would need to know how much you make per month in gross pay. The term gross pay refers to your income before any deductions are made. To determine your monthly pay, you would divide your annual salary by 12. An example would be:
$45,000.00 per year annual salary / 12 = $3,750.00 per month
It is important to understand how to use your income information to get different values for your salary. Your annual and monthly salary numbers are important for filling out applications, and your hourly pay can help you to compare what you make to others in your field. Once you are able to work back and forth between these numbers, you will have a comprehensive understanding of your income.
Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!