Everyone knows what they earn.
They just take the gross income their employer promised them ($40,000), and say: I earn $40,000 a year!
Then if you want to make it net income, you remove the taxes from that $40,000.
Now to find your salary per hour, you take that $40,000 and divide it by 2000 hours, and that’ll give you $20/hour.
(2000 hours = 50 weeks x 40 hours a week, assuming 2 weeks of vacation. Adjust this number as it fits your situation.)
You can even go farther and calculate your wage per hour based on your net income.
…and even farther still, if you estimate your expenses and deduct that from your income to get your disposable net income per hour.
But what are you really earning an hour?
What if you worked more than 40 hours a week? Or didn’t have 2 weeks vacation?
You’d be earning a lot less, technically.
Take for instance someone who makes $100,000 a year.
But what if you realize that she works 100-hours a week?
50 weeks x 100 hours a week = 5000 hours
$100,000 / 5000 hours = $20/hour
Is that any better than earning $40,000 a year at 40 hours a week in terms of working wage per hour?
Of course, most people would rather earn $100,000 a year even working 100 hours a week just to have the extra boost in income, but in that is what you feel, then why not pick up a second job then?
You could be making $40,0000 x 2 jobs = $80,0000 a year.
It isn’t easy to give up 100 hours of your 168 hours a week. You only have 68 hours to sleep, run errands and unwind which works out to 9.7 hours a day.
You’re basically a working robot.
It’s not just a basic workweek you should think about
When you take a job, think about how much time you’ll be working but also doing things related to your job.
As a consultant, I can travel from 15-20 hours a week flying back and forth (airport delays, commuting time).
That eats up my time and my money, but it can also balance out if I’m benched (not on a project, and sitting at home).
This is the reason why I assume that I’ll be working two thirds of the year, benched for a third, and I base my total hours of work on that with rough estimations.
So every job you take should be a serious decision
Yes, the economy sucks.
Yes, sometimes you just have to suck it up and take the job because you NEED THE MONEY TO EAT.
I am aware of that, but if you are in the position where they’ve weeded out hundreds of applicants and you are the chosen one who got a job offer, it means they want you.
If they are asking you to put in MORE time at work even though it’s more money, then why not see if it’s worth it per hour, and then try to get a little more out of it?
(Women especially, I am looking at you!)
Ask for more money.
Ask for more vacation time.
What’s the worst that could happen?
That they say: No, I’m sorry we can’t do that. Take it or leave it.?
You still have the choice to accept the job as-is or not!!
Every little bit you get, will count
As we all know, bonuses and stuff that is promised in the heat of the job offer but not noted in actual writing, shouldn’t even be considered for the sake of negotiating.
Don’t be swayed by that signing bonus! It’s just a one-time deal.
So calculate your wage per hour based on your last job offer, and see if this one stacks up.
It helps you put things into perspective, and your spending becomes all the more real when you think of it in work hours.