Employees and employers have different ways of reckoning compensation. The most usual means of measuring how much you earn would be your annual salary. In a year you would earn a certain basic salary, plus bonuses, which will give you your annual salary. However, if you are working hourly shifts, and you are being paid by the hour, you need to know how much you earn in a month. Same goes if you are being paid bi-weekly.
Expenses are counted by the month, after all. These include the rent, utilities, and even your budget for grocery shopping and food. Therefore, if you are budgeting then it makes sense to convert your bi-weekly or hourly pay into a monthly amount.
What you need:
- Your current pay rate
- Your time card, if available
Keep the rule of thumb in mind. Remember some basic computations. There are 52 weeks in a year. There are 12 weeks in a year. There are five days in a week. While each month usually has four weeks, simply multiplying your weekly salary by four shouldn’t quite work. Some HR departments compute each month as having 22 workdays, but, again, this might not be quite accurate since each month has changing number of weekdays.
Converting weekly into monthly pay. Let’s first use a weekly pay scheme to compute, for simplicity. First, multiply your weekly pay by the number of weeks in a year, which is 52. Then divide that number by 12. You will get your monthly pay. So assuming you get paid $1,000 per week, this will be come $52,000 per year. Divided by 12, that’s $4,333.33 per month.
Converting bi-weekly into monthly pay. Most companies pay its employees every 15th and end of month. It might be easier to convert this as being multiplied by two. But, for accuracy, we again use a similar computation to the above. First, multiply the bi-weekly pay by 26 (which is 52 divided by two). Then divide the number by 12 to get your monthly pay. So assuming you get $2,500 every two weeks, this becomes $65,000. Divided by 12, that’s $5,416.67 per month.
Converting hourly pay into monthly pay. Some jobs compute for a pay rate by the hour, but pay twice a month or at the end of every month. It might be convenient for you to have your time card, so you can compute for the actual work you do in a week. First, find out the number of hours you have worked in a particular week (this should usually be 40 hours for a full-time job). Then, multiply that with your hourly rate. Multiply this number by 52, and then divide by 12.
So if your pay rate is $40 per hour, and you usually work 40 hours per week, this would be $1,600 per week. Multiplied by 52, this is $83,200 per year. Divided by 12, that’s $6,933.33 per month.
Computing for your monthly pay can be useful if you are budgeting or if you are applying for a loan. For simplicity’s sake, you can always just multiply bi-weekly salary by two, or your hourly salary by the number of hours you work in a day, and the number of days you work in a week. However, to get the bigger picture, try computing for your salary for a year (52 weeks) and then divide it by 12.