How To calculate The Hourly Wage?

How To Calculate The Hourly Wage?

Why should you calculate the hourly wage at all? Doesn’t it appear on the pay slip? No, most pay slips do not show the hourly wage. But for certain comparison purposes, it is sometimes very useful to have your own hourly wage calculated or to calculate it yourself.

What Is The Difference Between Hourly Wages And Monthly Wages?

The difference is the basis of calculation. A monthly wage is a fixed agreed wage that does not fluctuate. Every month you receive the same wage or salary. In contrast, work is remunerated via a contractually agreed hourly wage based on the hours worked per month. Since there can often be fluctuations here (e.g. due to vacations or public holidays), the remuneration paid at the end of the month also fluctuates. If you work on the basis of such an hourly wage, then you do not need to calculate the hourly wage, because then it is of course already known.

However, if you work on the basis of a monthly wage, then the hourly wage is mostly not stated in the employment contract. However, your employer must still calculate the hourly wage on the basis of the monthly wage in order to calculate the remuneration for overtime, night, holiday or risk bonuses and short-time allowance.

Who Works On Hourly Basis?

Hourly wages are typically paid for mini-jobbers, pupils and students, craftsmen and domestic help. This approach is also common for assembly line work or on-call services. Likewise, when high-quality academic services are used, an hourly wage is often used as the basis for calculation.

How Can You Calculate The Hourly Wage?

In principle, the formula applies: Monthly salary divided by working hours. However, the problem with calculating hourly wages is that the number of working hours per month varies. Some months are longer or shorter and have more or less weekend or public holidays. But if you work on a monthly wage basis, you have a contracted weekly work schedule that serves as the basis for the calculation. The year has 52 weeks and 12 months, which means that a month has an average of 52 / 12 = 4.33 weeks. Thus, the hourly wage can be calculated as follows:

Gross monthly wage / (4.33 weeks/month * number of working hours/week) = hourly wage.

Examples Of Calculating The Hourly Wage

Two examples:

• Mr. M. earns 4000 € per month and works 40 hours per week.
  Solution: 4000 € / (4,33 * 40) = 23,09 €.
• Mrs. K. earns 4200 € per month and works 35 hours per week.
  Solution: 4200 € / (4,33 * 35) = 27,71 €

The hourly wage of Mr. M. is therefore 23.09 €, that of Mrs. K. 27.71 €.

Why Should You Calculate Your Hourly Wage?

Knowing the hourly wage helps with many comparisons. First of all, you can determine whether your hourly wage is above the statutory minimum wage of €10.45 (valid since July 1, 2022). In addition, you can also make a wage comparison and compare different jobs with each other using a standardized value. If, for example, you are applying for a 40-hour position after a 37-hour position, you can determine whether the increase in salary is only due to the more work performed or whether an increase in the hourly wage actually explains the additional pay.
In addition, you will learn more about hourly wages on the market and can use this knowledge profitably in your next salary negotiation. Calculating the hourly wage also helps you to better understand the payment of your overtime or any remaining vacation.

Calculate Hourly Wage: A Variant Of Salary Comparison

Calculating your hourly wage provides you with valuable information that can also help you on your career path. In addition to the transparency of salary calculations, you also have the opportunity to make comparisons, the results of which can be used in salary discussions. And if calculating your hourly wage – despite the relatively simple formula – is too complicated or inconvenient for you, you can find many hourly wage calculators on the Internet.