What Is an Annual Salary?

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An annual salary is the payment a worker gets from performing work over a year-long period. Although there may be an average annual salary for a particular job, a candidate's annual salary may be influenced by the employer's available budget and the qualifications and past experiences of the candidate. Additional commissions and bonuses are also key considerations.


The term "annual salary" refers to the given salary amount a trained worker will receive each year for a given job. The annual salary most often is broken down to bimonthly payments. In other words, the annual salary amount is divided by 26, which is the amount of payments a person would get during a year-long period.

Annual Salary vs. Hourly Wage

The main difference between an annual salary and an hourly wage is that a person must work to get paid when he is getting an hourly wage. For instance, a person working 40 hours one week and 20 hours the next will get paid for 60 hours of work when on an hourly wage. If a person gets an annual salary, he will get the same set payment every other week despite working less during the second week. In other words, a salaried person will get the same salary for working 20 hours and 40 hours. However, workers paid salries are often expected to work set hours and overtime when required.

Commissions and Bonuses

Although a set annual salary is provided when a person is hired, the amount can vary depending on the available bonus or commission payments for the work completed. For example, a salesperson may get an annual salary for interacting with clients and marketing products, but can also get commission payments for any additional sales she may complete.


You may be required to negotiate your annual salary with your new employer if you are offered a job where a salary is not currently set. The employer expects you to provide him with an annual salary that you feel you are qualified to receive. Your qualifications used in your negotiation process include your previous employment skills, your educational achievements and any additional achievements that relate directly to the responsibilities related to the new job.