How do you calculate annual income from an hourly wage?
Multiply your hourly rate by the number of hours you work per week, then multiply that by the number of weeks you work per year (e.g., $20/hour x 40 hours x 50 weeks = $40,000).
Is annual income the same as gross income?
Yes, annual income calculated this way is your gross income, meaning total earnings before taxes, benefits, and other deductions are taken out.
How does overtime affect your annual income calculation?
Overtime hours are paid at a multiplier of your regular rate, typically 1.5x (time and a half) or 2x (double time), so they add extra income on top of your regular annual earnings.
How many weeks per year should I use if I take vacation time?
Use 50 weeks instead of 52 if you take 2 unpaid weeks of vacation, since unpaid time off reduces the number of weeks you actually earn income.
Why is my take-home pay lower than my calculated annual income?
Because annual income figures are gross amounts before federal, state, and local taxes, FICA (Social Security and Medicare), and benefit deductions like health insurance or 401k contributions are subtracted.