How to Calculate Annual Income to Find Base Pay

by Valencia Higuera

Getting hired for a new job results in working as an hourly or salaried employee. Compensation for hourly employees is based on the number of hours worked, whereas salaried employees receive a set amount each pay period regardless of the number of hours worked. With salaried positions, employers typically state an annual salary or income, and they disburse this figure over 12 months or 52 weeks. But with a few simple calculations, you can determine your base pay to compute how much you earn per hour.

Discuss your annual salary. If you're newly employed, talk to your employer about salary information. If you're already employed and you want to calculate your annual salary, refer to your last pay stub from the previous year or your W-2.

Compute salary minus extra compensation. Pay stubs and W-2 list regular pay, commissions and bonus earnings. Base pay doesn't include income from extra compensation. Refer to the column on each of your pay stubs and look for information regarding regular income. Add up these figures.

Determine the number of hours worked per pay period. Multiply the number of hours worked per week by the number of weeks in a year. For example, a full-time worker typically works 40 hours per pay period, or 2080 hours a year. An individual who only works 20 hours per pay period works 1040 hours a year.

Divide annual salary minus extra compensation by the number of hours worked per year. For example, if your annual salary minus bonuses, tips and commissions is $30,000 and you work 2080 hours per year, your base salary is approximately $14.42 an hour.

About the Author

Valencia Higuera is a freelance writer from Chesapeake, Virginia. She has contributed content to print publications and online publications such as Sidestep.com, AOL Travel, Work.com and ABC Loan Guide. Higuera primarily works as a personal finance, travel and medical writer. She holds a Bachelor of Arts degree in English/journalism from Old Dominion University.

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