When you're changing jobs or jumping into a new salaried career, there are different ways to consider how much money you are making per hour or per year. For instance, if you are offered work per hour, how much is 20 an hour annually going to contribute to your bank account?
Reasons to Calculate Hourly Rate
There are many reasons to calculate your hourly rate from a single annually salary figure, or vice versa – to calculate your annual salary based on an hourly rate.
One of the most obvious reasons is to compare job offers.
If you are in a field that commonly uses hourly rate to make a job offer, you may come across an offer you need to adjust in order to compare them fairly. Often we will see this in a field like childcare. Daycare workers, nannies and au pairs may often get competitive offers made in both hourly and salaried rates. In situations like this, it's important to make sure you compare “apples to apples” to make sure you make the best decision.
Another reason you may want to calculate your hourly rate is if you are in a career change scenario.
By switching industries or job levels, you may have no idea what a fair industry standard is. So even though a large salary may look appealing to you, by the time you calculate the hourly rate you could have a big surprise on your hands. And not always a good one! Working more hours a week for that higher salary might just work out to making LESS money per hour than you are already making in your current job.
Finally, a third common reason to calculate rates both hourly and annually is if you are a freelancer or entrepreneur. It's important to know the value of your time – both literally and figuratively. Even side hustles like starting your own Etsy shop have an hourly value on your time.
How Much is 20 An Hour Annually – The Math
In general, the simplest way to think about what $20 per hour makes you over the course of the year is the following.
Multiply $20 times the number of hours you work per week times 52 weeks in a year to calculate your annual salary. So, even more simply:
$20 x [weekly hours] x [52] = Annual Salary
For an average 40 hour work week, this means that $20 per hour annually would be:
$20 x [40 hours per week] x [52 weeks a year] = $41,600 Annual Salary
Now, of course there are many other considerations that should come into play when comparing job offers. Often, jobs contracted hourly do not offer paid time off, so any hours missed mean that much less that you can make per year. Also, other benefits like health insurance or retirement contributions can contribute to an increase in overall salary.
