How to Convert an Annual Salary to an Hourly Wage
Many people find that their first steps on the career ladder are in jobs which are paid on an hourly rate, often quite a low one. As you move up the career ladder, sooner or later you will usually find you hit the point at which you move on to an annual salary, paid in monthly installments.
Although most people tend to prefer being paid by the year rather than by the hour, you may want to convert your annual salary into an equivalent hourly wage. For idle curiosity, to see how much more you're being paid in real terms for managing a business empire than you were flipping burgers. For future salary negotiations, when you realise that taking an annual salary actually means you've lost all those opportunities to boost your wage packet with extra shifts and overtime. And so you can impress your friends who are still paid hourly with your huge earning capacity (you may not keep these friends for long if that is your motivation).
The procedure for converting a salary to a wage is simple. Take your salary (let's assume here that it is $60,000 for the sake of argument) and divide it by 12. This gives you your monthly wage of $5,000. Well, you can dream, right? Next, work out the number of hours you work a week. You can either count up the number of hours in your standard working day and multiply by 5 (or by however many days a week you work), or just look in your employment contract, where it should be written. It's up to you whether you include your lunchbreak in this.
Again, for the sake of argument let's assume you work a 40 hour week. You then need to decide how many days you work in a month. Most people at this point will work to a rough assumption of four working weeks in a month - so divide $5,000 by 160 to get a very respectable hourly wage of $31.25.
An alternative, and arguably more accurate way is to divide $60,000 by the 52 weeks in a year ($1,153.85) and then dividing this by the 40 hours in a working week to give an hourly wage of $28.85. Although this is more accurate, it assumes that your salary will not change at all across a whole year, whether through promotions or bonuses or simple pay reviews.
Even more fun, once you have an approximate figure for an hourly wage, you can work out your wage per minute by dividing the rate by 60. Once you know how much you are earning for every minute at work, ($0.48 in this case), you can work out how much you have earned during the time you spend in the toilet, making a cup of tea or just staring out of the window.
These conversions should not be taken too seriously. Most professional positions will require you to work over and above your contractd hours at some point, whether in the office or from home, and come with other benefits than just the salary such as greater paid holiday entitlement, pensions, insurance maybe even a car. This is why although dividing your salary by 52 and then 40 produces a more strictly accurate figure, the first method can reflect some of the additional benefits and smooth out salary fluctuations. But it's interesting to see how your cushy desk job really compares with your earliest paper round or supermarket jobs.
