How to Calculate an Annual Wage
Annual wage refers the total pay an employee receives for the calendar year. Salaried employees are generally paid a set wage each pay period, which is based on the annual salary. Therefore, salaried workers typically know their annual wage. However, employers tend to give hourly employers only their hourly rate upon employment. Furthermore, their pay raises are usually based on hourly rate. To arrive at the annual wage, the employee may have to do the calculation himself.
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Instructions
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Multiply the hourly rate by the number of hours worked in the year. Include paid benefit days, such as vacation, sick and holiday pay. Suppose your work schedule is a standard 40-hour workweek and you earn $10 per hour. The calendar year has 2,080 work hours (52 weeks times 40 hours). Calculation: 2,080 hours times $10/per hour = $20,800, annual wage.
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Calculate your annual wage if you are part-time or have fluctuating work hours. You would need to know the precise hours worked each pay date. Furthermore, if you receive limited or no paid benefit days, your calculation should include only the days that you have been paid for. Consult your pay stubs or ask your employer for a printout of your annual work hours. Multiply the total by your hourly rate to arrive at the yearly wage.
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Include pay raises and supplemental pay, such as bonuses and overtime pay, if applicable. Suppose you work 20 hours per week (with no paid benefit days) and earn $9 per hour. You receive an hourly pay raise of $1, effective at the start of the second half of the year. Therefore, you were paid at $9 per hour for the first 26 weeks and at $10 per hour for the remaining 26 weeks.
First Calculation: 20 hours x 26 weeks = 520 hours x $9 per hour = $4,680.
Second Calculation: 20 hours x 26 weeks = 520 hours x $10 per hour = $5,200.
Annual Wage: $4,680 + $5,200 = $9,880.
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Multiply your pay period wage by the number of annual pay periods, if salaried. Suppose you earn $2,000 biweekly; this includes benefit days, for which salaried workers are typically paid. Calculation: $2,000 times 26 biweekly pay dates = $52,000, annual wage.
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Tips & Warnings
To arrive at your annual net wage, subtract your statutory deductions such as payroll taxes and wage garnishments, and voluntary deductions such as retirement and health benefits from your annual gross wages.
You can use an online wage and salary calculator to determine your annual wage.
References
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