Pay is quoted in whatever form suits the person quoting it. Employers say a yearly salary, shift workers say an hourly rate, and your bills arrive monthly. Converting between them is simple, as long as you avoid a few common traps.
The basic conversions
A year has 52 weeks, which is 12 months. Most full-time work is around 40 hours a week, which gives roughly 2,080 hours a year. So an hourly rate multiplied by 2,080 gives a rough annual figure for full-time work, and an annual figure divided by 2,080 gives an hourly rate. For another number of weekly hours, multiply the hourly rate by the hours, then by 52.
Do not multiply a week by four
A month is longer than four weeks. Four weeks is 28 days, but a month averages about 30.4 days, so there are roughly 4.33 weeks in a month. Multiply weekly pay by four and you under-count by about 8 percent, which is a real month's difference over the year. Multiply by 52 and divide by 12 instead.
The same trap works the other way. Two people on the same annual salary can look different if one is paid every four weeks, which is 13 times a year, and the other monthly, which is 12.
Pay periods and take-home pay
Tax is worked out on your yearly earnings, even when you are paid weekly. If you are paid every two weeks, you receive 26 payments a year, and in some years a calendar can contain 27. Our calculators let you choose the pay period so that the figure you see is the amount you will actually receive for that period.
Overtime, unpaid breaks and holidays
Annual figures built from an hourly rate assume you are paid for every hour, including holidays. If your job does not pay for holidays or public holidays, the real number of paid hours is lower. Subtract the weeks you will not be paid before you multiply. If you work irregular hours, add up a typical month and use that as your basis rather than the contract's headline hours.
Comparing two offers fairly
When one offer is hourly and the other is a salary, convert both to the same period, annual take-home, before you compare. Then add the extras: paid leave, employer pension contributions, bonuses, health cover and the cost of getting to work. A slightly lower salary with strong benefits can leave you better off, and our tip on comparing job offers covers this in more detail.
A short worked habit
Write the figure in all four forms, hourly, weekly, monthly and yearly, before you decide whether it is enough. If you can see that the monthly number covers your fixed costs and leaves room for saving, the headline salary stops being abstract.
Calculators for this guide
More tips
- How to Read a Payslip, Line by Line
- Marginal and Effective Tax Rates: Why a Pay Rise Never Costs You Money
- Retirement Contributions and Take-Home Pay: Before Tax or After?
- How to Compare Two Job Offers Properly
- Why Your Real Payslip May Differ From an Online Estimate
- Bonuses and Overtime: Why They Seem to Be Taxed More
- How to Build a Budget From Your Take-Home Pay
- States With No Income Tax: What That Does and Does Not Mean
- Moving for a Job: Will You Really Be Better Off?
- Self-Employed? How Much Should You Set Aside for Tax
- Asking for a Raise: Using Take-Home Numbers to Plan the Conversation
- Student Loan Repayments and Your Take-Home Pay
- A Yearly Tax Check-Up in Thirty Minutes
- All tips and guides
These guides are general information and estimates to help you plan. They are not tax advice. Rules and rates change, so check the official tax authority for your country.