While making a yearly budget for yourself, you might realize that calculating it on the basis of an hourly wage can be quite tedious and the numbers might be too scattered to analyze. Hence, for all purposes of accuracy and long-term financial planning, converting your hourly wages into an annual income is a good idea. The simplest way to do this would be to multiply your hourly wage into a weekly calculation. Once you’ve done this, you can multiply it into 52 weeks (the number of weeks in a year) and come to a rough annual estimate of your income.
Calculating an Annual Salary from an Hourly Wage
If you work for hourly wages you might need to convert it into an annual salary for clarity and ease of computing. You need to figure out how many hours in a week you are working. Only count the hours when you are on the clock and not lunch or breaks in between.
If you work 50 hours a week and take a 1-hour lunch break, then your hours on the clock is 45 hours per week. You need to multiply the hours you work per week by your hourly wage. Then you would multiply that number by the number of weeks in a year, 52. Let’s assume you work for $30 an hour for 45 hours a week, your annual salary would be $30 X 45 X 52. Result $70,200 annually.
Adding in Your Overtime Hours
Overtime pay is when you clock in more than the requisite hours per week. Ideally, if you want to find out how much your overtime affects your annual salary, then you need to calculate your OT pay for at least 1 month.
- Assuming your regular working hours are 40 hours per week, and you’ve worked for 43, 49, 52 and 44 hours, then your average overtime hours would be (3+9+12+4)/4 = 7
- If your hourly wage is $30, your company’s overtime rates are 1.5x salary, your overtime pay would be $30 X 1.5 = $45
- Your regular weekly salary averages out to $30 X 40 = $1200. Your average weekly overtime pay would be $45 X 7 = $315. Your total weekly salary would be $1200+$315 = $1,515
- Which brings your annual salary to $1,515 X 52 = $78,780