If you are one of several thousand people who is looking for a new job every day, then you will quickly realize it can be quite daunting. You have to radically uproot your entire life – not to mention work out whether the new payment structure of a job is going to work out in your favor.
While the salary is not always the most critical part of a job description, it can feature near the top. However, everyone lists the income in different ways: Hourly wages, daily wages, weekly, monthly, or even annual revenue.
Because they differ in how they are presented, you may see a position as particularly lucrative – even if it’s not. It will be much easier if you can compare apples with apples – e.g., a job with an annual income compared to something similar.
The paycheck calculator can solve this problem. Once you have a few jobs you may want to apply for; you can use the calculator to ensure you measure all income rates in the same way – be that a weekly wage, fortnightly, monthly, or yearly.
Instead of working out all this financial information by hand, you can rely on the trusty paycheck calculator to do it for you. While it can do most of the equations for you, it still needs a couple of things from you. You have to know how many hours you will be working and the information you have available regarding the income – e.g., $100,000 annual salary.
The currency is preset in the paycheck calculator, and you can change this to suit your needs. If you are comparing a few different income types, the information can fix itself in place, so you don’t have to keep reentering it.
What’s more, if you go into advanced mode, you can find out how much you earn every minute for a bit of fun!
For salary conversion, there are a few base rates which tend to be assumptions. A working week is 40 hours, a year is 52 weeks, and a month is one of 12 in one year.
While you can rely on a paycheck calculator to provide correct information, it’s helpful if you understand the mathematics behind it in case you want to double check it. We’ve included a few examples of working these problems out below, based on an annual income of $100,000.
An Annual Salary Converted to an Hourly Wage:
$100,000 annually / 52 weeks / 40 hours weekly = $48.08
A Monthly Wage to an Hourly Wage:
$8,333 x 12 / 52 weeks / 40 hours per week = $48.08
A Weekly Paycheck to an Hourly Wage:
$1,923 / 40 hours per week = $48.08
A Daily Paycheck to an Hourly Wage:
$384.62 per day / 8 hours = $48.08
When you read through a job description you see online; you may see the words “salary range” thrown around quite a bit and wonder what it means. The range is the minimum and maximum a company can pay you based on different things – including their internal budgets.
Often, the range is based on the hours you work and the experience you bring to the table. The range includes a low, a median, and a maximum.
Let’s say you applied for a job at a paper mill, with a salary range of between $40,000 and $50,000. The $40,000 figure would be your low point, $45,000 your median, and $50,000 your maximum.
When an employer offers a range instead of a fixed salary, it provides both parties with a bit of flexibility. The employee can ask for more based on their experience levels, while the employer has room for negotiating based on achievements and successes.
The way hourly and monthly salaries works is quite straightforward. If you are on an hourly rate, you receive money for every hour worked – including any overtime pay. If you are on a salary, you get paid a fixed amount, and the “overtime” component can depend on your workplace and how they structure it.
If you are paid an hourly rate monthly, then your employer calculates it based on the hours you worked multiplied by your hourly rate. Let’s say you earn $20 per hour and worked 160 hours for the month.
You would calculate it like this:
$20/hour x 160 hours = $3,200
Hourly workers also qualify for overtime, which you calculate at 1.5 standard hours. Let’s say your regular working hours included 120 hours but you worked 40 hours of overtime for the month, your employee would calculator your monthly pay packet like this:
$20/hour x 120 hours + $30/hour x 40 hours of overtime = $3,600
If you want to know how much an hourly employee will work, then you would be safe to assume it’s an average of 40 hours per week. However, those hours can differ depending on the employee and employer, as well as the arrangement they have in place. The minimum wage can also depend on where you live.
In the case of salaries, however, the paycheck calculator would see it quite differently. A salaried worker has a guaranteed minimum earning. Usually, you find the monthly income by dividing the annual income by 12 months.
Most salary workers are exempt employees. This means they do not get overtime payments. However, once again, it can depend on the company. Several offer overtime incentives as additional pay, time off, or hours in lieu, depending on the agreement between the staff and the business owner.
If an employee is on a salary but is non-exempt, they must get one and a half hours’ worth of pay for every hour they work over their set 40-hour working week. These laws and rules can change depending on your country’s labor laws.
As with anything, there are pros and cons of working on a salary and an hourly rate. You only get to dislike or appreciate those points when you start working.
For example, on a salary, you tend to get more benefits, like parental leave, 401K plan, and health insurance. Sometimes, your responsibilities within your position are more important too. Another advantage of being on a salary is security. You know how much you are going to get every month and can plan your finances around your income.
A noticeable drawback, however, is that if you are an exempt employee, your employer doesn’t legally have to pay you any overtime once you work over your agreed number of hours for the month. You would then essentially work for free.
If your boss pays you by the hour, overtime works in your favor. After your 40-hour working week, you earn 1.5 times as much for every hour. You can also benefit from a bit more flexibility in your working hours.
However, working on an hourly rate can have its drawbacks as well. If your employer is having a quiet week, they can send you home early. You do not have the same pay security as someone on a salary.
Now that you know how to establish what your income in a new job would be (thanks to the paycheck calculator) you can now weigh the pros and cons of making the move. Will a new job offer more money? Will you get a better work-life balance? Will you enjoy it more?
There are several reasons why people start looking for a new job. Often, they feel stressed, unappreciated, overworked, or dissatisfied with one or more parts of their work. Sometimes, it’s the business itself, which makes you redundant, fires you, or closes down.
Whatever your reason for changing jobs, it’s crucial to find out if the payment structure is right for you. This paycheck calculator can surely help.
