We all know that there are certain times in life when just gotta sit down and do the math.
Whether it’s determining a household budget; planning a much needed and deserved vacation; weighing the costs of in-state verses out-of-state tuition; or tile instead of hardwood flooring. No matter what, sometimes you must determine if the numbers work or not.
That being said. One of the most important times to do the math, in fact, it should be an ‘every time you do the math’ situation is when you’re calculating your gross annual wage.
Regardless if your employer pays you by the hour (non-exempt status) or if you’re paid the same salary weekly (exempt status, at least 40 hours per week in most states), in most employment scenarios, the formula below can be helpful.
Annual wages calculation:
Number of hours worked weekly X 52 weeks in a year X your hourly rate = your gross* annual pay
For example 40hrs X 52wks = 2,080 annual hrs worked X $13.75 per hour = $28,600 gross annual pay
*Gross income: income before federal and state taxes and other withholdings.
Again, the formula should help you calculate/ project your gross annual earnings if you are working full time, part time or even seasonal when overtime pay is not a factor. Overtime calculation requires some additional computations.
To determine your hourly wage, though you are paid as an exempt employee, simply divide your week’s wages by 40 hours per week.
Exempt weekly salary to per hour wage calculation:
Weekly pay / by 40 hours = your per hourly rate
For example $1,050 weekly pay / by 40 hours worked = $26.25 per hour
Of course, if you have exempt status and you work more than 40 hours in a given week your per hour wage will diminish with every hour worked even though your weekly pay will remain the same.
Doing the math/wage calculations based on your current and/or anticipated pay should make budgeting for everything else a bit simpler. Most certainly it should make any decisions regarding your career easier to manage; consider it another helpful tool in your arsenal.