Examples of Annual Salary and Annualized Full-Time Salary Calculations
These examples show you how the annual salary and annualized full-time salary that you see on the salary get calculated.
The legal employer standard working hours, person working hours, and FTE come from the person's employment record. You can view it using the Employment Info task for your teams or your client groups. The salary annualization factor and frequency come from the salary basis associated with the person's salary record.
Assumptions
Here are the expressions used to calculate FTE and the annualization factor for hourly rates:
- FTE = Person Working Hours per Week / Legal Employer Standard Working Hours per Week
- Annualization Factor for Hourly Rates = Legal Employer Standard Working Hours per Week * Weeks per Year
For these examples, the variable Legal Employer Standard Working Hours per Week is 40.
Person Working Hours = Standard Working Hours (40h)
Here are the hourly rate inputs when the person working hours are the same as the standard working hours, which are 40 hours.
| Calculation Input | Value |
|---|---|
| Person working hours | 40 |
| FTE | 1 |
| Annualization factor | 2080 |
| Salary amount | 15 USD |
Here are the corresponding salary calculations and results.
| Salary | Calculation | Result |
|---|---|---|
| Annual | 15 x 2080 | 31,200 USD |
| Annualized Full-Time | 15 x (2080/1) | 31,200 USD |
Person Working Hours = Standard Working Hours (35h)
Here are the hourly rate inputs when the person working hours are the same as the standard working hours, which are 35 hours.
| Calculation Input | Value |
|---|---|
| Person working hours | 35 |
| FTE | 1 |
| Annualization factor | 1820 |
| Salary amount | 10 USD |
Here are the corresponding salary calculations and results.
| Salary | Calculation | Result |
|---|---|---|
| Annual | 10 x 1820 | 18,200 USD |
| Annualized Full-Time | 10 x (1820/1) | 18,200 USD |
Person Working Hours < Standard Working Hours
Here are the rate inputs when the person working hours are less than the standard working hours. Typically, this applies to part-time people.
| Calculation Input | Hourly Rate Value | Monthly Rate Value | Annual Rate Value |
|---|---|---|---|
| Person working hours | 20 | 20 | 20 |
| FTE | 0.5 | 0.5 | 0.5 |
| Annualization factor | 2080 | 12 | 1 |
| Salary amount | 15 USD | 5,000 USD | 50,000 USD |
Here are the corresponding salary calculations and results.
| Salary | Annual Salary Calculation | Result | Annualized Full-Time Salary Calculation | Result |
|---|---|---|---|---|
| Hourly | 15 x 2080 x 0.5 | 15,600 USD |
15 x (2080/1) |
31,200 USD |
| Monthly | 5,000 x 12 | 60,000 USD |
5,000 x (12/0.5) |
120,000 USD |
| Annual | 50,000 x 1 | 50,000 USD |
50,000 x (1/0.5) |
100,000 USD |
Person Working Hours > Standard Working Hours
Here are the annual rate inputs when the person working hours are greater than the standard working hours. This can apply to people who have an on-call component to their job.
| Calculation Input | Value |
|---|---|
| Person working hours | 48 |
| FTE | 1.25 |
| Annualization factor | 1 |
| Salary amount | 20,000 USD |
Here are the corresponding salary calculations and results.
| Salary | Calculation | Result |
|---|---|---|
| Annual | 20,000 x 1 | 20,000 USD |
| Annualized Full-Time | 20,000 x (1/1.25) | 16,000 USD |
Reference
For more details about how FTE affects salary and example best practices for salary management, see How Salary and FTE Work Together (document ID 2168552.1).