Annual wage is the total amount of salary a person makes in a year’s period. A year is usually defined as the beginning date of the calendar to the end of the year. In many places the Gregorian calendar is used, and beginning date of the year is January 1, while ending date of the year is December 31. In some regions another calendar might be used personally or by a government. Whichever calendar the government dictates is usually used for business and taxation purposes.
For some people, it is very easy to estimate or immediately know their annual wage. They may be hired at a specific annual amount, say $60,000 US Dollars (USD) a year. They get $5000 a month and the rate is unchanging.
Others work at an hourly wage, and in order to calculate their annual wage, they’ll have to multiply hours worked by day to days worked per week. This is then multiplied times weeks worked per year. Some people are able to shorten these calculations by having a dependable weekly wage than can then be multiplied times weeks worked in the year. Folks should subtract any weeks from the year when they don’t get paid, like for unpaid vacations.
Another way of estimating annual wage is looking at last year’s income reports or tax reports. Providing that the salary has not changed, last year’s tax reports are a good estimate. Some people are challenged with these estimations if they work several jobs, have different compensation levels depending on shifts, or change jobs.
There are good reasons to have some sense of your annual wage. Those who apply for things like credit cards, car loans, mortgage loans or even student aid might need to know this information, and obtaining any type of loan or student aid could be predicated in part on wage level. As a worker, it also makes sense to understand how fair compensation is for work. Sometimes knowing annual wage is a good bargaining point when people want to ask for a raise, realizing they’re not being fairly compensated for work.
One way people evaluate their annual wage is to look at average wage for specific careers. This can be of use when people want raises, though it should be noted that average or median salary could represent employees living in many places and might not be representative of average compensation for a particular employee, at a certain level, in a given area. People interested in a raise may want to search locally to determine if their compensation really is less than other employees like them.
From a business standpoint, many countries require companies to make a full statement of annual wage and of any deductions like taxes at the end of the year. These statements, such as the US W-2s and 1099-misc forms have to get to employees by a certain time each year. This gives employees or contract workers plenty of time to prepare their yearly taxes.