A salary is a form of payment from an employer to an employee for work done.

Hourly rate is the rate an employer agrees to pay a worker per hour worked.

Annual salary is the amount of money paid to an employee over the course of an year for work done.

**Formula to calculate hourly rate.**

- We begin by dividing the annual salary by the number of weeks in an year, 52 weeks.
- Then divide the result by the number of hours worked.

**Example:**

Calculate the hourly rate of an employee if she works for 40 hours weekly and her salary is Sh. 254,800.

Therefore, the hourly rate is Sh. 122.50.

For instances involving overtime hours;

- We divide the annual salary by 52.
- then we divide the result by Overtime hours multiplied by 1.5 plus the worked hours.

**Example 2:**

Calculate the hourly rate of an employee whose usual working hour are 40 per week but he decides to work for extra 5 hours every week. His annual salary is Sh. 364,000.

Therefore, the hourly rate is Sh. 147.37