Evaluating jobs: Hourly vs salary pay

Whether you're applying for a job or considering a switch in career, you might have encountered this question: Should I go with an hourly wage job or a salary job? Which one will pay more? Let's explore this a bit further.

Pretend you've got a job offer paying $\mathrm{\$}15$‍ per hour. You'd be working a 40-hour week. How much would that be in a yearly (or annual) pay? It's a pretty straightforward start: $40\times \mathrm{\$}15$‍ gives us $\mathrm{\$}600$‍ in a week. Now, this is where confusion could set in: To compute for the monthly pay, a common mistake some people do is to multiply that $\mathrm{\$}600$‍ by four - assuming there are only four weeks in a month. Then they multiply that so-called "monthly pay" by $12$‍ to estimate the yearly salary. However, this would be incorrect, because they've unknowingly skipped over a few extra weeks. Doing math that way, they're shorting their pay calculation by nearly a month's worth of pay each year!

So, let's do it the correct way. We've already correctly calculated $\mathrm{\$}600$‍ weekly pay. At this point, we just need to multiply the $\mathrm{\$}600$‍ by $52$‍, because there are $52$‍ weeks in a year.

So, $\mathrm{\$}600$‍ weekly pay times $52$‍ weeks gives us $\mathrm{\$}\mathrm{31,200}$‍ .

Now let's switch gears and go the other way. Let's say you've got a job offer with a set yearly salary of $\mathrm{\$}\mathrm{60,000}$‍, but you're curious about how much that is per hour. To figure this out, you'll divide the salary by $52$‍ to figure out your weekly pay. Then, you will divide that by $40$‍ assuming you are working full time.

So, grab your calculator and do some quick calculation:

Your salary would be the same as making around $\mathrm{\$}28.85$‍ per hour.

Now, let's put this skill to use. Imagine this: you're a dedicated employee currently earning a yearly salary of $\mathrm{\$}\mathrm{50,000}$‍. Every week, like clockwork, you work $40$‍ hours. One day, a new opportunity comes your way: a job that pays by the hour, at $\mathrm{\$}29$‍ per hour, with the same expectation of working $40$‍ hours per week. You can't help but wonder whether this new job might pay more than your current one. So, let's compare:

Turns out, the new job's annual pay of $\mathrm{\$}\mathrm{60,320}$‍ a year is more than your current salary of $\mathrm{\$}\mathrm{50,000}$‍.

While a different job might offer a higher salary, it's crucial to keep in mind that there's more to a job than just how much it pays. You should consider things like the kind of work you'll be doing, the benefits the job provides, the balance between work and personal life, and the job's stability. Though the other job might offer more money, weighing all aspects can guide you to make the best decision.