As a simple baseline calculation, you can assume 2 weeks of paid vacation per year. That leaves 50 working weeks, and if you work a typical 40 hours a week, then you have a total of 2,000 hours of work each year. In this case, you can quickly compute the hourly wage by dividing the annual salary by 2000. Your yearly salary of $166,000 is then equivalent to an average hourly wage of $83 per hour.
Want to reverse the calculation? Start with the hourly wage and answer the question: 83 dollars an hour is how much a year?
Now let's consider the extreme case where you get $166,000 a year, but you get no paid vacation. In the previous case, we assumed 2 weeks of vacation, but if you worked the entire year without any breaks, that would be 52 weeks. Assuming 40 hours a week, that equals 2,080 hours in a year. Your annual salary of $166,000 would end up being about $79.81 per hour.
If you wanted to be even more accurate, you can count the exact number of working days this year. 2013 starts on a Tuesday (January 1, 2013) and ends on a Tuesday (December 31, 2013). It has a total of 365 days in the year including both weekdays and weekends. There are 104 weekend days (counting every Saturday and Sunday in the year), and 261 weekdays (Monday through Friday). So if you worked a normal 8 hour day on every weekday, and didn't work any overtime on the weekends, you would have worked a total of 2,088 hours over the 2013 year. You can then convert your annual salary to an hourly wage of roughly $79.5 per hour.
Most companies give employees time off for various holidays, so that should really be included in the calculation. The problem is that different countries can vary in their national holidays, and your company may give certain days off but not others. On average, in the U.S. there are 7 major holidays: New Years Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, the day after Thanksgiving (since this is always a Friday), and Christmas. Many businesses also have an additional floating holiday that is sometimes used for Christmas Eve, New Years Eve, or one of the days near July 4th. Often this is based on whether one of those days falls on a Tuesday or Thursday. Adding that extra holiday can give employees an extra long weekend. Some schools can also be off on Presidents Day, and banks may have their own official holidays. Retail businesses often have different rules for what's considered a typical "business day". Federal holidays may include Veterans Day, Columbus Day, Martin Luther King Day, and Washington's birthday. Of course, holidays may also fall on a weekend day, in which case you might get the previous Friday or the following Monday off. Given all these variations, here's a table showing how the number of holidays affects your hourly rate:
|$166,000 annual salary in 2013|
|# holidays||# working days||hourly rate|
|6||255||$81.37 per hour|
|7||254||$81.69 per hour|
|8||253||$82.02 per hour|
|9||252||$82.34 per hour|
|10||251||$82.67 per hour|
|11||250||$83.00 per hour|
|12||249||$83.33 per hour|
|13||248||$83.67 per hour|
|14||247||$84.01 per hour|
Since there are 12 months in a year, you can estimate the average monthly earnings from your $166,000 salary as $13,833.33 per month. Of course, some months are longer than others, so this is just a rough average. If you get paid biweekly, you may get 2 checks in one month and 3 checks in another, so some calculators look at a month as a 4-week period, with 13 of these periods in a year. In that case, you would be getting $12,769.23 per 4-week period.
Assuming 52 weeks in a year, you would make $3,192.31 per week.
First of all, if you're working a regular 8-hour day, then you can simply take any of the hourly rates listed above and multiply it by 8 to get your daily rate. For example, if you worked a total of 2,000 hours in the year, then your hourly rate is $83 which means your daily rate is $664 per day.
Now here's an interesting twist. Let's say you start a business that earns you passive income. Your business runs without you, and if it's an online business, the internet is running 24 hours a day, 7 days a week, with no breaks on weekends or holidays. Now we can reverse the formula and figure out how much you would need to make each day in order to add up to a total annual income of $166,000.
Since there are 365 days in 2013, you would need to make $454.79 per day to reach your goal of $166,000 a year. That's equivalent to earning $18.95 per hour assuming your business could be running 24 hours a day. Breaking it down even further, you'd need to make $0.32 per minute from your internet business, or the equivalent of 0.53 cents per second.
ConvertUnits.com provides a tool you can use to calculate the equivalent hourly wage based on your annual salary. You can factor in paid vacation time and holidays to figure out the total number of working days in a year. The salary calculator will also give you information on your weekly income and monthly totals. Remember that a full salary with benefits can include health insurance and retirement benefits that add more value to your total annual salary compared to similar hourly rates. You may also want to factor in overtime pay and the effects of any income taxes on your take home pay. Type in your own numbers and convert annual salary to hourly wage for your job to find out how much you're worth!
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