Does Your Salary Match Your True Hourly Wage?

Sure, your salary agreement may say $50,000 per year…but how many hours are you working to attain that $50,000? If you are working a straight 40 hour week and taking 2 weeks off per year, you are making a very decent hourly wage of $25. If you are working a 60 hour week and taking 2 weeks off per year, your hourly rate drops down to $16.67 per hour. Putting in 75 hours a week like my brother does at his accounting job? Congratulations – you are now making $13.33 per hour. That $50,000 salary doesn’t sound so great anymore, does it? After all, while those paychecks might be of a decent size, you are trading a LOT of hours for that $50,000, meaning you are making about what the average first year employee in this country makes per hour. Are you a first-year employee? Then you are doing just fine. A veteran? Maybe not…

I will be the first one to say that the amount of money I make doesn’t really matter to me, as long as I am comfortable. I have no use for more than I need to have a decent lifestyle. And that is one of the major reasons I left my high-paid corporate job 3 years ago – I didn’t want to trade all those hours for dollars anymore. I wanted to make my own hours and set my own rates, so I had control over how much I worked and how much I got paid for each hour of work I did. I wanted to know that if I decided I was going to make $50,000 or $75,000 or $100,000 per year, it was going to be worth the amount of time I put in, leaving me with plenty of time for my family, myself, my hobbies, traveling, etc.. And it was the best decision I ever made, because I now can see that if I ever put in 10 hours per day (which I never do, BTW), I am truly making the most of that time and getting paid for it. If my self-determined pay is $35 per hour, that’s $350 for those 10 hours of work! Most salaries are based on 40 hour weeks, so anything you work above that and don’t get paid for is free labor for your company and less money for you.

So, that leads me back to the title of this post — Does Your Salary Match Your True Hourly Wage? Have you left a job because what you were promised in salary didn’t match the amount of hours you had to put in? Did you strike out on your own, deciding how much YOU wanted to make – and then made it? Let’s discuss in the comments!

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Comments (7)

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  1. Annie Jones says:

    I’m a stay-at-home wife and grandmother, and although I don’t get monetary pay, the intrinsic rewards I get are worth my time.

    Back when I worked outside the home, I would never take a job that was salaried rather than hourly. Even the higher level administrative jobs I held paid hourly. I was hired to work IN RETURN FOR being paid, and was always a diligent worker when I was on the clock. But I did not give my time to my employer for free. Ever.

  2. david says:

    That’s exactly what I am talking about – giving your time in exchange for nothing. Too many people do that every day!

  3. Tyler says:

    Yes. My company’s overtime policy is you must work 4 hours over your weekly schedule, and the time must be a minimum of 2 hours in a day, to receive the overtime pay. In addition, time can be flexed over a two week period. So in my time here, I have not worked over 80 hours in two weeks without being compensated for it.

  4. Dawn says:

    I took a voluntary pay cut when I had my older daughter almost 6 years ago and I now work part time from home (rather than crazy hours at the office). Now, I pay my mom a significant portion of my salary to watch my kids three afternoons each week, but I figure I gross about $25 per hour after childcare costs. It’s not fantastic (especially since I now work some oddball hours), but I get to stay with my kids and bring in a little money, which is great.

  5. DoneToZen says:

    There seems to be a disturbing trend with companies expecting salaried workers to work more than 40 hours a week (or maybe I’m just “lucky” that way?). According to my boss, 45-50 hours a week is “normal”/expected of me, and I’m only being worked to death/have a right to complain if I had averaged more than 55+ hours a week for at least three months.

  6. I couldn’t have said it better myself–this is exactly why I walked away from my $60K a year job (great) for which I had to work about 75 hours a week(awful). And it was in the restuarant biz so those hours were not spent behind a desk, at all.

    Much more comfortable now at my $50K a year, 40 hour a week job.

    The key term in your post to me, was comfortable. As long as I am that, I could care less about anything else.

  7. Emily Morris says:

    I feel like i deserve to get one of your bookor one of the winner. First of all i’ve been frugal all my life. I came from a third world country tnat in order to survive is to learn how to be a conscious saver. My parents were my role model because they showed me how to saved and be a smart shopper.