How to Figure Yearly Income from Hourly Rate

When talking with Scott, a student who is doing some database work with me this semester, the topic of hourly pay versus salary pay came up. I mentioned a simple way to estimate yearly income from hourly rate on the fly.

Let’s say you are offered a job for $11/hour. If you assume you work 40 hours a week for 50 weeks a year you can simply double the hourly rate and that will be the yearly income in thousands, so $11/hour = $22,000/year.

I figured out this method years ago when I was job hunting in college so I could easily compare hourly and salary positions. Of course you’ll want to figure benefits and possible overtime into the final decision, but this gives you a quick idea.

This method works because 40 hours per week multiplied by 50 weeks makes for 2,000 working hours in a year (assuming two weeks of unpaid vacation). Multiplying by 2,000 is the same as multiplying by 2 then by 1,000 so that’s exactly what we do.