How To Calculate Salary
Many people aren’t certain about how to calculate salary. Individuals get paid in many different ways; some are paid weekly, while others are paid bi-weekly, monthly or semi-monthly. If you are having trouble figuring out exactly how much you make in a year, this article will help you determine how to calculate your salary.
Remember that while you may not actually get paid cash money, other benefits factor in to your real pay including health insurance, a company match of your 401K, paid vacations, etc.
1. Consider how often you get paid
Do you get paid every week? You may get a paycheck every Friday, or you may get paid on the 1st and the 15th of each month. How often you get paid is an important factor in figuring out how much your annual salary is.
2. Use your paycheck stub to do the calculations
On your pay stub, find the amount under “gross earnings” or “gross pay.” This is the figure you want to use when calculating your salary. This is how much you actually earn before payroll taxes, insurance and other deductions are withheld.
3. Do the math
If you get paid every week, multiply the amount located on your payroll check stub by 52 (weeks.) This would be your annual salary. For example, if your gross earnings are $500 per week, your salary for one year would be $26,000. If you are paid semi-monthly, you receive a paycheck 24 times each year. In this case, you would multiply your gross earnings by 24 which would be your annual salary.
If you are paid bi-weekly, this means you get paid every other week on a set day such as Wednesday or Friday, no matter what the day of the month is. In this instance, you get paid 26 times per year so you want to multiply your gross earnings by 26.
4. Reverse the calculations to determine hourly wages
If you want to know how much you make per hour, the equation is simple. If you are paid weekly, simply take your annual salary amount and divide by 52. At this point, you will know how much you make in a week; then you will divide the weekly total by 40 hours to arrive at an hourly figure. If you are paid bi-weekly, divide your annual pay by 26, then divide that figure by 80 (if you work 40 hours per week.)
Figuring out how much you really make can be tricky, especially if you are paid semi-monthly where the actual time worked doesn’t always work out to 80 hours. In this case, you can get close to an hourly wage by using 86.66 hours for each pay period.
If you were wondering how to calculate salary, the information found in this article should be of benefit.