How to Calculate Wages & Salaries

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Salary and wage are roughly synonymous and refer to regular payments for your work. In common parlance, wages often refer to an hourly rate of pay and salary to an annual pay. For planning purposes, it can be helpful to calculate what your true hourly wage is based on your salary, or to figure your annual salary based on your hourly wage. Once you know these, you can make apples-to-apples comparisons with other employment opportunities.

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Calculate Salary From Wage

  • Review a recent pay stub to find out what your hourly wage or rate of pay is.

  • Total the number of hours you work in a week. If you work regular hours each week this is simple. If your schedule changes from week to week, take the average of a number of weeks to get a good estimate.

  • Multiply your hourly wage by the hours worked in a week to get your gross weekly wage. For example, if your wage is $15 per hour, and you work 35 hours per week on average, your gross weekly wage is $525.

  • Multiply your gross weekly wage by 52 to get your annual salary. In this example, a gross weekly wage of $525 equals an annual salary of $27,300.

Calculate Wage from Salary

  • Total the number of hours you work in a week. If your schedule changes from week to week, take the average of a number of weeks to get a good estimate.

  • Multiply the average number of hours you work each week by 52 to get a total of annual hours worked. For example, if you work an average of 40 hours per week, you work 2,080 hours per year.

  • Divide your annual salary by the total number of annual hours worked. For example, if your annual salary is $55,000, and you work 2,080 hours a year, your hourly wage is $26.44.

References

  • Photo Credit Steve Cole/Photodisc/Getty Images
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