When generally starting off in the job market, people tend to take on jobs based on hourly pay. Most industries like retail and hospitality (where most of us started off) offer entry-level jobs with this type of pay structure. It’s easy to calculate, and there’s no trouble figuring out how much you’ll end up with, in your pocket.
However, as time progresses so will your career. Sometimes, this will also mean a change from hourly pay to salary pay. When this happens, it’s important to understand what the differences are in each case so you know what it is that’s changed.
Why Is This Helpful to Know?
Knowing how many hours there are in a year, specifically working hours, can help you figure out your annual take-home income. This is particularly useful for hourly employees. For salary employees, knowing this information can help you calculate your hourly pay which is important if you’re generally doing a lot of overtime.
It’s also very helpful to make sure you’re maintaining a good work-life balance. If you know how many hours you work a year, then you can figure out how many free hours you have for extracurricular activities. All important things to evaluate if your job is working for the kind of life you want to lead.
Difference Between Hourly And Salary Pay
Apart from the obvious increase in responsibility, better job title, and potential of having employee’s under your charge, there are a few other differences between both types of jobs worth noting.
- Loss of overtime pay. Hourly employees are paid based on how many hours they work, and anything past the standard 40 hours a week comes with additional overtime pay. However, when you’re a salaried employee you get paid the same – regardless of how many hours you work. While some companies will offer you the ability to take extra time off at a later date to make up for this, not all do.
- Increased benefits. Along with more money also comes extra side benefits that hourly works don’t tend to have. Additional vacation time, medical insurance, paid sick leave, and stock ownership plans just to name a few. Some companies, especially now with Covid having changed the work landscape so much, even offer the option to work from home for their salary employees.
- Higher overall pay. In general, when you make the move from hourly to salary you’re looking at a large pay scale possibility. Not just from your actual immediate take-home pay, but from a few other add ons as well. Things like bonuses, promotions, and potential raises.
- No longer under unionized protection. Some hourly positions are under the protection of unions, which means aspects like pension plans would be safeguarded for them. But, when you enter the world of salaried jobs it tends to mean you’ve become middle or upper management. Those are the exact positions in the company that unions protect their members against. And so, those benefits would no longer apply to you.
How To Calculate Your Earnings in Canada?
The first step in figuring out how many hours you work in a year, and therefore how much you’re earning, is by knowing how many work hours there are in a year. It’s a common misconception that there are exactly 52 weeks in a year, and therefore 362 days (which equals 2,080 work hours in a year). A closer number would be an average of 2,087 work hours, based on the mild fluctuations from year to year.
From there, the next step is to actually do the calculating. The generally accepted equation (taking into account the 52 weeks isn’t an exact number) for this would be as follows:
(Average number of hours worked p/week x 52) – [(Number of PTO in hours) x Number of hours worked per day] = Total worked hours in a year
To calculate your weekly hours, find your average between any week to week changes. For your PTO (paid time off) be sure to include sick time, vacation time, and anything else within that category.
Employee Working Conditions in Canada
Apart from the mandatory minimum wage of $11.00 to $14.00 per hour, depending on which province the company is operating in, there are other government requirements each employer must abide by. All employees will not exceed an 8hr per day working week except when previously agreed by both parties or where overtimes pay is provided.
Other than that, employers must provide both a healthy and safe work environment as well as proper complaint procedure channels and a way for employees to safeguard themselves from possible retaliation from this.
For more information, we always recommend checking directly from the source. Read more about working conditions in Canada.
Related Readings
Professional Leadership Institute (PLI) is an educational website providing professionals from all types of businesses with practical education in entrepreneurial leadership. To keep evolving your leadership toolkit, additional PLI resources below will be useful:
