How much is an annual salary per hour?
You need a few numbers and a calculator to convert an annual salary to its hourly rate.
The formula for calculating an hourly rate based on an annual salary is as follows:
\dfrac{Annual \ Salary}{Hours \ Per \ Week \times Weeks \ In \ Year}
Where Annual Salary is the annual salary amount (for example, 80,000), Hours Per Week is the hours worked per week (for example, 38) of the annual salary and Weeks In Year is the number of weeks in a year.
The annual salary and the hours per week should be found on your employment contract. The third metric Weeks In Year can be a little more tedious to find.
How To Find The Number Of Weeks In A Year
The number of weeks in a year can range from as low as
52
as the simplest and roundest form to as high as
52.29
.
To find what basis is used by your employer you may need to directly check with your payroll department or with your Enterprise Agreement or Modern Award .
The reason for the discrepancy lies in the simple metric of knowing how many days are in a year.
Is it 365? Or 366 (if it’s a leap year)? Or do we apply the average 365.25 to incorporate those years that are leap and non-leap years?
Whatever the answer from your payroll department is will then determine the basis for the metric on the number of weeks in a year to be your hourly rate.
| Days In Year | Weeks In Year |
|---|---|
| 364 | 364 ÷ 7 = 52 |
| 365 | 365 ÷ 7 = 52.14285714 (52.14 to 2dp) |
| 365.25 | 365.25 ÷ 7 = 52.17857143 (52.18 to 2dp) |
| 366 | 366 ÷ 7 = 52.28571429 (52.29 to 2dp) |
As you can see from the above table, there are a few differences.
If someone is earning $100,000 a year working 38 hours per week the difference between the first metric of weeks in a year (52) compared to the leap year metric of 52.29 is as follows:
52 Weeks In A Year
\dfrac{100000}{38 \times 52} = \dfrac{100000}{1976} = 50.6073
52.29 Weeks In A Year
\dfrac{100000}{38 \times 52.29} = \dfrac{100000}{1987.02} = 50.3266
The difference between these two hourly rates per hour is:
50.6073 - 50.3266 = 0.2807
Which over the course of a week would be:
0.2807 \times 38 = \$10.66
And over the course of 52 weeks (a year) would be:
\$10.66 \times 52 = \$554.32
