Depending on your job, you may get paid either an hourly wage or a yearly salary. Some employees may prefer to work at an hourly rate because it helps them get a better sense of the amount they are getting paid for a specific time frame. On the other hand, those who work a full-time job may prefer the security and stability that comes with getting paid a yearly salary. At the end of the day, it doesn’t matter if you’re getting an hourly wage or a salary. But for those who work on a yearly salary and are curious to know how much they are making per hour, there’s a simple formula you can use to get your answer for an hourly to salary calculator. Hourly Wage vs. Yearly SalaryGetting paid an hourly wage has many pros and cons, as is getting paid a salary annually. It really depends on the industry, the nature of the job and on the position, and whether or not you feel comfortable with the way you are paid. If you get paid an hourly wage, then there’s a good feeling of knowing that you’re getting paid for the exact number of hours you're working. Often, the expectation is that you're not going to work more than your required number of hours; if you do work overtime, however, you will be compensated for that time. You may have the flexibility to change your schedule so that you can still get your hours, in case you need to take a day off from work. You may even be able to put in additional hours, if you want to make more money. That being said, you will lose money for any hours you don’t put in, which means that your paycheck won’t always be consistent and neither will your schedule. You may not get any benefits and your job may not be as secure. Getting paid a yearly salary works for some people, because they can feel happy and secure, knowing that they are getting a regular paycheck. It's likely that they have more benefits with a salaried position than they would otherwise. Often, a 401K and health insurance come with a salaried position. Also, with a salaried position, work schedules are much more consistent, vacations and sick days are explicitly stated, and in general, you may get paid more than you would with an hourly position, because your work schedule is set at 40 hours a week. One of the biggest issues with getting paid a yearly salary, however, is that you may be expected to put in additional hours beyond your regular hours, since you're paid a set salary. If you choose not to put in the additional time, you may be seen as a “lazy” employee in a competitive industry. Why Figure Out Your Hourly Wage?If you feel that you're putting in considerably more hours a week on your 40-hour-a-week job than should be required in an 8-hour day, then you might be wondering what your hourly wage would be if you were getting an hourly rate instead of a yearly salary. When you do the math, you might discover that your hourly wage is a lot lower than you thought. If this is the case, you may choose to speak with your employer about what you’re experiencing, to see if you can reduce your work responsibilities or increase your pay. Of course, you may also discover that your hourly wage would actually be quite high, in which case, consider the positive points of your job. Salary to Hourly CalculatorTo figure out your hourly wage based on your yearly salary, all you do is this: Take your yearly salary and divide that number by 52 (the number of weeks in a year) and then by 40 (the number of hours in a standard work week). Of course, if you work less than 40-hours a week (perhaps, 35 hours) then use that number, instead. For instance, if you get paid $45,000 a year and you want to know what your hourly wage is, simply divide that number by 52, which gives you approximately $865. Take this amount and divide it by 40 and you’ll get $21 an hour. This is your hourly wage. That being said, you would have to account for the taxes coming out from your salary, and which benefit packages you and your employer are paying into.  Before I get into the arithmetic – WHICH IS EASY – I must establish first that there is no law on this. This is just something that your payroll/accounting/HR folks will quibble over from time to time, so you need an expert to make it canon. That’s what this is all about: How to convert a salary into an hourly wage. The simplest and most common methods to make the conversion are as follows: Simply use the annual salary and divide into it the scheduled hours per year. Example: John earns $50,000/year. He is scheduled to work 40 hours a week. There are 52 weeks per year. To get his hourly rate, divide 2,080 hours into $50,000. The hourly rate is $24.03. This works if the calculation is done on a weekly (versus annual) basis, too. Example: If Mary makes $1,000 per week, and is scheduled to work 40 hours per week, divide 40 hours into $1,000 to get her hourly rate. $25.00 The other way to do this is to use the actual hours averaged instead of the "scheduled" hours. Using the examples above... Example: If John averages 47.5 hours per week, then 47.5 x 52 = 2470 and his $50,000/2470 = $20.24. Example: If Mary averages 37.5 hours per week, then her $1,000/37.5 = $26.66. This method could result in a raise for some people, but a cut in pay for others. In these examples, we see that Mary, working less, gets an increase, while John, working more, is given a decrease. Needless to say, this is not my personal preference; but it is viable. NOTE: OPM uses 2,087 hours instead of my 2,080. You could do that, too! Visit the SHRM Compensation Data Center for real-time, HR-reported compensation data reports. Rue Dooley, SHRM-SCP has been an HR Knowledge Advisor for SHRM for over 20 years and has plenty of HR experience as a practitioner and consultant. Rue has daily direct contact with HR professionals around the world, helping them to create solutions, to improve systems, and to find and use resources that improve the delivery of the HR function. Rue has authored and co-authored numerous articles on a variety of subjects; conducted webcasts and podcasts; created videos, and has been quoted in various media outlets.
The SHRM Blog does not accept solicitation for guest posts. |
How to figure out my hourly wage
Copyright © 2024 moicapnhap Inc.
