Salary Calculator

What Is A Salary Calculator?

A pay calculator that converts hourly annual Income is a tool that allows you to input your hourly wage and the number of hours you work per week, month, or year. It will calculate your annual Income based on that information.

How does a pay calculator convert hourly Annual income work?

First, we start by taking how many days you're working per week, and then we take how many hours you’ve worked. Then we multiply that by the number of hours we’ve worked per week in a year. Thus, there is your hourly Annual Income.

When looking for a new job, you need to have some annual wage that comes with the job. This yearly salary determines how you’re going to be living your life essentially and paying bills.

So then, why do we need this? The answer is simple. It is summed up to better view the job and the hours you will be performing.

When looking at other jobs, you may not get a clear view of the numbers and prices even though each formula has the same outcome. The general idea may confuse you. So here we break it down for you.

This new tool can help save you from dire mistakes when finding job offers and the amount you’ll be offered. When using this tool, you need to take how much hourly wage you make and convert it into your annual salary.

Let’s first understand what wage and salary are.

A salary is how much you’re normally being paid regularly. This is not something that normally goes up or down. It’s not commission based.

Now the wage is a little bit different. Wage is more how many hours you’ve worked; then you multiply with the amount of the hourly pay that has been assigned. Now, what is one key difference? Salaried workers get paid more than waged workers.

However, wage workers get more over time than salaried workers. Most salaries are paid periodically, like bi-weekly, monthly, weekly, etc.

Now, the reason why a salary earner may earn more is more of the role they play. For example, a worker at H&M will get a wage income, while someone at a corporate office would most likely get a salary.

example of a salary calculator

To give a few examples, let’s start with getting paid $25 an hour. Then, you’ve worked 40 hours a week. Taking those numbers and multiplying them, your average salary would be $52,000.

Source: calculator.net

Another example could be if you’re working 25 hours a week and your hourly pay is $30. Overall you would have worked 100 hours a month. Because of the low hours, your annual salary would be $36,000, and this is without taxes taken.

As per the chart above, we can safely say that the annual Income differs dramatically with hourly pay and how many hours per week you’d work. With a wage, sometimes you can be given less or more. So while the salary is more fixed, you need to make those hours up.

Now, looking at the Income of the first one according to the calculator site, you can see that the first annual Income would be 92.5% of the median salary overall in an American household.

In comparison, the second one would be in the top 76.5% of the salary. Now, this is a big difference because here we get to see how every American who’s making money. Who else is most likely to make that much money?

Many more topics need to be considered and background when calculating your Annual hourly Income.

Employee Benefit affected by hourly income

Now, let’s discuss some factors that may affect our hourly annual Income.

Some factors that you may not know that are affected by your annual Income are your benefits, such as 

• your social security, 
• healthcare insurance, 
• old age, and 
• disability. 

Other personal benefits could be paid vacation, sick days, and bonuses.

Overtime would also get counted in this scenario. Since the more overtime you do, the more taxes would be taken off, your annual salary for each year can differ, and they can be changed. Your gross amount will differ when your taxes are made in the final year.

Having a tool to convert your annual Income is critical since you will have some money taken out of your annual Income for taxes and the benefits listed above.

Now, if you’re self-employed, the reality is that sometimes you don’t have the insurance or benefits or time paid off, Since you are working for yourself.

However, the salaries should be higher than someone who works full time somewhere since their salaries have some deduction.

Adjusted vs. Non adjusted salary

Now that we have discussed all the benefits and where some of our paychecks go, let's talk about how to come up with adjusted and unadjusted salaries.

As seen from the chart above, we can calculate the unadjusted salary. Another example is if I work 40 hours a week with a salary of $40 an hour and I’ve worked 54 weeks out of the year. Then we would calculate it like this:

$40 x 40 x (54) = $86,400

Now, let’s take all the vacation and sick days you would have gotten and subtract those days from the above amount.

So let’s give it 10 vacation days and 4 sick days. That’s two weeks taken away from your salary. This would give us the following:

$40 x 40 x (54-2) = $83,200

On top of that, you will also need to know how much your government taxes are. So let’s say you are taxed annually at 20%. 

$83,200 - (20% of 83,200) = $83,200 - $16,640 = $66.560

This would result in your annual Income coming to a total of $66,560. There we have your annual yearly salary calculated.

Taking this into summary, your salary revenue would be about $83,200. However, after applying your benefits, medicare, overtime, and for some ROTH IRA, your vacation days, and your due taxes to the economy, your gross salary would be $66,560.

US Salary Information

Let’s talk about some of the attributions you may have that might affect your annual salary.

These attributions are

1. Age

Ages 40-45, when people have experience and more knowledge of their jobs, will most likely have a higher chance of getting a higher paid income than someone who’s still in their early to late twenties.

2. Education

Education is a significant factor. Workers who had high school degrees earned significantly less than workers who had bachelor's or master's, with masters making more than both of the parties combined.

3. Experience

Experience is also a significant factor in how much wage you could get. The more experience you may have, the better your position will bring. The more chances you have to get a promotion.

4. Gender

Regarding gender, men would have earned an annual salary of $55,500 compared to women, which would be around $44,360 in America.

5. Company Overall

How does a company affect an employee's annual salary? The employee profit would be great if they had great reviews and significant investments.

This can give workers a bonus or more room for promotions. Compared to a company that is not doing well, which can lead to employees getting laid off and having lower rewards.

Taxes and salary calculation

Let’s talk about what your taxes are based on. As Americans, we need always to be aware of where our taxes are going and how our taxes will be determined.

Many factors affect your taxes. To name a few, we have 

• how many children you have, 
• your marital status, 
• your Income, and 
• whether you have additional taxes withheld from your check. 

According to New York Check Calculator:

As an individual, if you are a family of 6 on low-income wages. Your taxes would be low since it’s evident because of the big family you have. You need the money given to you in your wage or salary.

While a middle-class family who is not below the low-income revenue would get taxed more and be expected to pay more.

We also have your FICA taxes, the annual medicare and social security wages you would be taxed on. They would tax you at rates around 6.2% to 1.45% of your annual salary.

Now one thing to be wary of is that the annual median salary is changed yearly. As shown below in Model one.

As you can see, the salary median increases yearly because NYC's living conditions have also increased.

decrease Taxes while calculating salary

As New Yorkers, there are ways we can put our taxes down legally.

For example, one way is if you contribute more to employer-sponsored retirement accounts. This would be like putting more money into a 401k(A) or a 403 (B).

Another way to save money is putting money away into a health savings account (HSA) or a flexible spending account. (FSA)

Here, I will provide two examples of who would get more taxed and who would probably get less taxed.

1. Example #1

Paul is an Uber driver, married to a housewife, and has four kids. He makes only $1000 per week and has to feed and pay rent and utilities. Paul lives in NYC and pays his rent and his dues.

2. Example #2

Jared is a single Mechanical engineer who works in Manhattan with no kids. He is making a salary of almost $2400 a week. Jared only pays for his rent, utilities, and car payments. He may do a bit of splurge from time to time on himself.

Looking at these two examples, who would most likely be taxed higher? If you're thinking of Jared, you're right.

Why? The answer is simple, even though both have rent dues and utilities, they pay them.

Paul has to pay for his children's groceries and clothes and his wife’s groceries and clothes. Paul also has to pay for their doctor bills and health insurance.

Now, the government knows that Paul will not be able to pay for everything if they take hefty taxes from Paul, thus why he is taxed less.

Jared, however, is single and a Mechanical Engineer with no children or spouse. He also has a higher income than Paul. This would make Jared a candidate open to being taxed more since his expenses aren’t as much.

Conclusion

In conclusion to this article, always look at every criterion before taking a job, put those criteria into a calculator, and convert them into your hourly Income.

You should consider doing this, especially if you’re a single female with a spouse or children. As you can see from before, the Income for females is less, especially if you have a high-paying job and don’t have many bills to pay.

Making sure the company you are going into has good reviews is also an excellent factor to look at. For example, if the company makes good money and has good investments and profits. You can start looking at bonuses.

However, if a company is not well endorsed with low periodic profits, that could be a problem calculating your annual salary.

You must also look into your state's annual median salary and how much taxes are expected yearly since most of the taxes and median salary increase annually. You must try to keep in touch with how much taxes are being put up each year.

Calculating your annual taxes has become easier since you have all the resources and information you need to figure!

Researched and authored by Neili Popal | LinkedIn

Reviewed & Edited by Ankit Sinha | LinkedIn

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