A salary breakdown to hourly pay can reveal how much you are earning based on the amount of time you put in. People who make $50,000 a year but work 80 hours a week aren't doing themselves any favors, so it might make sense to seek a better arrangement. It's also important to consider any employer benefits like health care coverage, paid time off and stock options in the compensation breakdown. While these are harder to factor in, they are significant monetary benefits.
Salary to Hourly Breakdown
To calculate a salary breakdown, you'll have to include your vacation time, holidays and other paid time off (PTO) to get the most accurate number. According to the experts at Indeed, you can add up the exact number of days you worked and then subtract your PTO. So if you had 250 available workdays, you might have only worked 240. Now, multiply the hours worked each day by the number of days worked over those 12 months.
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If you worked eight hours daily for 240 days, you would have worked 1,920 hours. On the other hand, if you worked 10 hours a day for 240 days, the number of hours will be 2,400. That's quite a difference. Divide your annual salary by the total hours to see your yearly hourly wage. Someone earning $50,000 who worked eight hours for 240 days earned $26.04 an hour; working 10 hours for 240 days comes to $20.83.
Annualizing a Salary
Hourly employees who get paid weekly, bi-weekly or other times throughout the year can annualize their salaries using similar simple math equations. As an example, you can first multiply the hourly wage ($20) by the number of hours worked in an average week. Someone who gets paid that and works 20 hours a week earns $400. If they are paid bi-weekly, this is $800 per paycheck and $1,600 a month.
To convert weekly to monthly wages, you divide 52 weeks by 12 months; this equals 4.333. A weekly wage of $400 x 4.33 = $1,732. Multiply that by 12 to get the annualized salary: $1,732 x 12 = $20,784. To annualize a weekly salary, you'll need to multiply a weekly wage by 52. However, if your career is in something like teaching, the calculation will be more complicated; the educators at Carroll Independent School District explain how you can calculate more complicated examples.
My Salary and W-2 Don't Match Up
W-2 forms sent by employers reflect employee earnings in any given year, but what if a salary and W-2 don't match up? It's vital to keep accurate records of your yearly pay and carefully read over every W-2 received. Employers have until January 31 to send these out and if you think something is incorrect, reach out to them quickly to correct it before the April 15 tax filing deadline.
These forms indicate the employee's gross pay before any deductions are taken out. If something doesn't look right, compare it to your records and see if you are the one in error. Someone may have missed a commission or bonus or left something else out or added the wrong thing. Should you be convinced that the W-2 is wrong, contact your company's bookkeeper, accountant or HR department. You may be able to see your pay stubs online; this can provide the information that you need.
If you're no longer working for that employer, it can be harder to get answers. Make your inquiries as soon as possible and keep track of any contact with the company. When they aren't cooperative, speak with a tax professional about submitting a Form 4852. This is a substitute for a missing or incorrect W-2. And if all else fails, you can amend the tax return later on; make sure to still file your return on April 15.