What Does Hourly to Yearly Mean?Hourly to yearly is a term used when calculating how much an employee who is paid by the hour would earn under an equivalent yearly salary. This calculation is called an hourly to yearly conversion. Despite the word “conversion,” it does not change how an hourly worker is paid, but simply tallies their annual income. Show Why Are Hourly to Yearly Conversions Done?Hourly workers (and their employers) may wonder how their wages compare to other workers who are salaried. An hourly to yearly conversion enables them to compare apples to apples. How Do You Convert Hourly to Yearly?Calculating an hourly employee’s yearly salary is simple. Just add up the number of hours they work in a year and multiply it by their hourly rate. For example, an employee who works 1,800 hours per year and is paid 40 dollars per hour earns the equivalent of an annual salary of 72,000 dollars. Overtime rates, bonuses, holiday differentials, and other adjustments to the employee’s usual pay are generally not considered in this basic calculation. Can You Convert a Yearly Salary to Hourly?A salaried worker can use a different formula to see what their unadjusted hourly wage would be. First, multiply the number of hours they work each day by the number of days they work in a year to determine how many hours they work per year. Divide that figure by their annual salary. The result is their hourly wage. For example, if an employee works eight hours a day on 240 days in a year, that’s 1,920 hours. Divide their annual salary of 57,600 dollars by 1,920 and you see their hourly wage is 30 dollars. Whether you convert from hourly to yearly or yearly to hourly, remember that these figures represent gross income, which is income before any payroll deductions are made for taxes, employee health insurance, etc. Take-home pay after deductions will be less.  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. What is the annual salary of $45 per hour?$45 per hour is $93,600 a year. This number is based on 40 hours of work per week and assuming it's a full-time job (8 hours per day) with vacation time paid. If you get paid bi-weekly (once every two weeks) your gross paycheck will be $3,600.
How do I calculate how much I earn a year?To calculate an annual salary, multiply the gross pay (before tax deductions) by the number of pay periods per year. For example, if an employee earns $1,500 per week, the individual's annual income would be 1,500 x 52 = $78,000.
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How to determine yearly salary from hourly rate
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