How to Calculate the Hourly Rate of a Salary Employee

Different types of jobs are classified as either exempt or nonexempt positions in terms of overtime pay. Nonexempt positions are paid hourly, and exempt positions are paid an annual salary. If you have multiple job offers, some might offer you an hourly wage, while others might offer you an annual salary. Knowing how to convert the salary to an hourly wage can help you accurately compare the two offers. To make an accurate conversion, you need to know how many hours a week you work and how many weeks per year you are paid.

Things You'll Need

• Calculator

Instructions

1. Total the weeks per year covered by a salary. Include paid vacation time in this estimate. For example, if an employee works 50 weeks a year and has two weeks of paid vacation, you would add 50 weeks and two weeks to get 52 weeks.

2. Divide the salary by the number of weeks per year the salary covers to find the weekly rate. In this example, if the employee makes $70,000 a year, you would divide $70,000 by 52 to get $1,346.15.

3. Divide the weekly rate by the number of hours worked per week to find the hourly rate. In this example, if the employee works 40 hours a week, you would divide $1,346.15 by 40 to get $33.65 per hour.

References

• Intuit: Hourly Wage Calculation