HR Glossary / Annualized Salary

The annualized salary is an estimation of the yearly income of an employee based on daily or hourly wages.

What Is the Difference Between the Annualized Salary and the Annual Salary?

The annual salary is the total amount of money an employee receives for a full year of work. It can be based on hourly wages or a fixed salary.

The annualized salary is the estimation of a salary distributed over a full year. For example, school teachers work over a 10-month period, but are still paid biweekly during the summer. Considering the annualized salary ensures that they receive a regular paycheck throughout the year.

How to Calculate the Monthly Salary Based on the Annualized Salary?

To calculate the monthly salary of an employee, the annualized salary must be divided by the number of months worked to figure out the monthly income, or by 26 to calculate the biweekly income.

For example, an employee who earns an annualized salary of $50 000 would have a monthly income of $4166.67 or a biweekly income of $1923.08.

Start Scheduling
in Minutes.

14-day free trial. Easy setup. Cancel anytime.