Hourly to Yearly

What is Hourly to Yearly?

Hourly to Yearly is a term used to calculate how much an employee who is paid by the hour would earn under an equivalent yearly salary. This is a conversation rate used when an employer is considering moving an employee from an hourly pay rate to a yearly salary rate.

How do you calculate Hourly to Yearly?

To calculate the yearly salary, consider the following formula:

Hourly wage x Hours worked per week x Weeks per year = Yearly Salary

$15/hour x 40 hour per week x 52 weeks per year = $31,200

The yearly salary in this scenario is therefore $31,200.

What are the key differences?

A yearly salary means being paid the same amount on each paycheck. A yearly wage is a term of employment, and the employee will receive the same amount for as long as they hold the same job or until the terms are renegotiated.

While salaried employees typically receive a fixed pay rate, they also have a set of responsibilities and expectations to be met, which often results in them working longer hours. This could make work-life balance significantly harder to achieve.

Hourly employees are paid for their hours worked. The more they work, the higher their overall payment will be.

In general, hourly employees can find it easier to maintain work-life balance if they have good management skills. Once their scheduled tasks are done for the day, they can use the rest of their time to focus on their hobbies, family, or other tasks.

However, hourly employees also risk being vulnerable to changes in the economy. For example, if the company they are working it needs to urgently cut costs, those who work part-time, contractually, or on a freelance basis are usually the ones who feel the budget cuts first. One way hourly employees can combat this is by joining a union.

Conclusion

Wages are often one of the most significant motivators influencing employment and there are different payment structures available. When discussing payment structures with employees during the recruiting and onboarding process, make sure to inform them of the different options available to choose from.

For additional information, see terms entitled Hourly to Annual Salary, Hourly to Salary.