# Annualized Salary

## What is an Annualized Salary?

An annualized salary is a type of compensation that uses the average earnings of an employee to determine their pay. This is typically done to make sure employees are paid more than they were originally promised, and it also makes sure they receive their full bonus amount.

## What is the difference between annualized and annual salary?

Annualized salary is the yearly income calculated based on an hourly wage. An annual salary on the other hand is the amount paid over a period of one year regardless of the number of working hours.

## How to calculate annualized salary?

There are several factors to consider when calculating an annualized salary. It can be calculated using any pay schedule that exists in an organization.

Annualized salary is usually determined by multiplying the hourly wage by the number of hours worked per week, multiplied by 52 weeks in a year. If your employee works overtime, this number should be added to the total number of hours worked.

So, if your employee gets paid monthly, the formula is:

(Hourly Wage) x (40 hours) x 52 weeks = Annualized Salary

If it is a salary and not an hourly wage, the formula to calculate your annualized salary is different. In this case, you can use a reference period of one hour. To calculate this, you should know how many hours the work year is (2080 hours). That number doesn't include overtime, so don't forget to include it in the calculation.