How can you calculate hourly wages?


Quick Answer

To calculate a salaried employee's hourly wage, multiply the salary amount per pay stub by the payment frequency and divide this number by 2,080 to get the hourly wage, according to Intuit. A full-time employee normally works 2,080 hours per year or 40 hours per week.

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Full Answer

If an employee receives $1,200 every two weeks, and there are 26 pay periods in a year, then his annual salary computes to $1,200 x 26 = $31,200. Dividing this number by 2,080 yields the hourly rate, which is $15. If the employee works a different number of hours, add up the total number of hours worked in a week, and multiply this by 52 to get the number of hours worked yearly. Use this new number to calculate hourly wage, explains Intuit.

Job applicants, employees, employers and statisticians refer to the average hourly wage when comparing and negotiating compensation. Knowing the average hourly wage helps a job applicant negotiate a better salary by showing a supervisor how his job offer compares to wages in other companies. It can also support an employee advocating a pay increase, according to the Houston Chronicle.

The average hourly wage of all employees on private nonagricultural occupations, when seasonally adjusted, was $24.95 in June 2015. The highest hourly wage was in the utilities industry, where workers on average made $36.79 per hour, while the lowest was in the leisure and hospitality industry, where workers made only $14.28 per hour, states the Bureau of Labor Statistics.

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