Many people tend to get confused as to whether they would prefer to take a yearly salary or an hourly wage, and the financial ramifications of either of them. Certainly each have their good and bad points and should be researched thoroughly before a decision is made in favour of either. Certainly making the wrong decision in these matters can mean the difference between making the money you want and seemingly working your fingers to the bone for a pittance.

Converting your salary into an hourly wage sounds like a simple enough thing to do, however there are several things that must be taken into account for an accurate measurement. The basic method for conversion is as simple as:

Salary divided by 12 (for months), divided by 4 (weeks in a month) and then divided by 40 (hours).

So taking a $40,000 per annum salary as an example:

40,000 divided by 12 = (3333.33) divided by 4 = (833.33) divided by 40 = 20.8

This makes the hourly rate roughly $20.8 per hour.

This then gives you a basic hourly rate based upon a 40-hour working week. This isn't entirely accurate however because not every month has exactly four weeks and not every job is based on forty hours of work per week either. So to work this out to an exact figure requires additional information and would need each month to be worked out separately.

Another consideration when converting salary into wages is that over the long term, leap-years must be taken into account. These will affect the fall of the weeks and will also give you extra money with wages. Because of course you get paid for every day you work, rather than a flat rate for the month.

Aside from the actual monetary differences of a wage against a salary there are also other differences that should be considered. For example with a salary you are usually entitled to more rights and have guaranteed employment period, usually of at least a year. Some jobs that pay a wage have no such guarantees in place, as well as often having less provision for things like sick pay and vacation time.

One large bonus that wages have over the salary however is overtime, which can make a big difference to how much you end up making at the end of the year. First of all overtime by law is optional with a wage based system, and because of this a higher rate is paid to encourage people to want to do it. This can be as much as double usual time or even triple on holidays etc. With a salary you are often required to work over forty hours per

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