In this article we will learn how to calculate hourly rate from annual salary. Depending on your job and the employer’s preference, you may get paid either an hourly wage or a yearly salary.

Hourly rate is the rate an employer agrees to pay a worker per hour worked. An hourly rate is preferred because it gives a better sense of the amount an employee is getting paid for a specific time frame.

Annual salary is the amount of money paid to an employee over the course of an year for work done. Some people like it because of the security and stability that comes with getting paid a yearly salary.

### Formula to Calculate Hourly Rate from Annual Salary.

- 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 1:**

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