How to Calculate Annual Salary From Hourly Wage

Many jobs are paid based on an hourly rate rather than an annual salary that's divided up into predetermined amounts for each pay period. Usually, this does not make any difference, but occasionally you may need to calculate annual salary from hourly wage. Credit applications usually require a statement of your annual income, or you may have a second job and want to estimate how much tax liability you'll have so you can have extra money withheld to avoid owing a lot next April 15. It's not hard to calculate annual salary from hourly wage as long as you keep a few things in mind so you end up with an accurate figure.


Step 1

Determine the actual hourly wage. This is not always the base wage you see listed on a paycheck stub. Some hospitals or round-the-clock manufacturing operations pay a shift differential that's added to the base wage. For example, your base wage might be $12 per hour plus a 10 percent shift differential (an extra $1.20 per hour) for a total of $13.20 per hour.


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Step 2

Figure the hourly wage if you receive tips as a regular part of your pay. Your total hourly wage is the base amount your employer pays you plus the average tips you earn each week divided by the average number of hours you work. For instance, you might be paid $3.50 per hour for 30 hours per week and make an average of $300 in tips, which works out to $10 per hour in tips. Your hourly wage works out to $3.50 per hour plus $10 or $13.50 per hour.


Step 3

Multiply the average hours worked per week, up to 40 hours, by the actual hourly wage to find your total regular wages per week. If you work any overtime hours (in excess of 40 hours per week), multiply the overtime hours by the hourly wage and then by 1.5. Add the regular and overtime pay together to get your total wages per week.



Step 4

Calculate annual salary from hourly wage by multiplying the total wages per week (from Step 3) by 52 weeks, unless you work only part of the year. If you work only part of the year, multiply by the number of weeks you work. For example, if your total wages per week are $450 and you work year-round, your annual salary is 52 times $450, or $23,400.

Things You'll Need

  • Calculator

  • Base hourly rate

  • Information on adjustments to hourly wage



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