Hourly wage to annual salary calculator
It can be helpful for workers in Canada to calculate their annual salary from their hourly wage for budgeting purposes, filing their taxes or making a large purchase. The hourly rate to annual salary calculator can help them to figure out how much they really earn in a year.
Calculating an annual salary from an hourly rate is simple. Just insert the average number of hours worked per week, the number of weeks of vacation and number of holidays taken, and the hourly wage. The tool will convert that hourly wage into an annual salary.
Please note that the simplified formula above does not take into account overtime pay or paid vacation time. Your actual annual salary may be slightly different from this number. It can vary from job to job and province to province. Our calculator takes into consideration paid statutory holidays.
How many hours is full-time employment?
There is a limit of 48 hours of work per week for most industries. Employees are also entitled to at least one full day of rest per seven-day period. Any hours beyond the standard 40 are considered overtime. They must be compensated at least 1.5 times the employee’s regular hourly rate. Exceptions apply for some jobs. These exceptions include managers, doctors, lawyers, dentists, engineers and architects.
The hourly minimum wage in Canada varies from province to province, so where you live plays a big role in how much you will earn. In 2022, the lowest minimum wage is $11.81 per hour in Saskatchewan. Nunavut has the highest at $16 per hour.
| Province | Minimum hourly wage | Annual salary (assuming 40 hours per week) |
|---|---|---|
| Alberta | $15.00 | $31,200 |
| British Columbia | $15.20 | $31,616 |
| Manitoba | $11.95 | $24,856 |
| New Brunswick | $11.75 | $24,440 |
| Newfoundland and Labrador | $12.75 | $26,520 |
| Northwest Territories | $15.20 | $31,616 |
| Nova Scotia | $12.95 | $26,936 |
| Nunavut | $16.00 | $33,280 |
| Ontario | $15.00 | $31,200 |
| Prince Edward Island | $13.00 | $27,040 |
| Quebec | $13.50 | $28,080 |
| Saskatchewan | $11.81 | $24,565 |
| Yukon | $13.35 | $27,768 |
Minimum wage and annual salary by province
It is important to note that there is no defined annual minimum salary for an employee in Canada. Throughout the country, the minimum wage is defined instead as an hourly rate. Legally speaking, there is no annual minimum wage since hourly jobs may not guarantee a specific amount of hours or a regular schedule.
Federal Paycheck Calculator
When you start a new job or get a raise, you’ll agree to either an hourly wage or an annual salary. But calculating your weekly take-home pay isn’t a simple matter of multiplying your hourly wage by the number of hours you’ll work each week, or dividing your annual salary by 52. That’s because your employer withholds taxes from each paycheck, lowering your overall pay. Because of the numerous taxes withheld and the differing rates, it can be tough to figure out how much you’ll take home. That’s where our paycheck calculator comes in.
Tax withholding is the money that comes out of your paycheck in order to pay taxes, with the biggest one being income taxes. The federal government collects your income tax payments gradually throughout the year by taking directly from each of your paychecks. It’s your employer’s responsibility to withhold this money based on the information you provide in your Form W-4. You have to fill out this form and submit it to your employer whenever you start a new job, but you may also need to re-submit it after a major life change, like a marriage.
If you do make any changes, your employer has to update your paychecks to reflect those changes. Most people working for a U.S. employer have federal income taxes withheld from their paychecks, but some people are exempt. To be exempt, you must meet both of the following criteria:
Federal Top Income Tax Rate
When it comes to tax withholdings, employees face a trade-off between bigger paychecks and a smaller tax bill. It’s important to note that while past versions of the W-4 allowed you to claim allowances, the current version doesn’t. Additionally, it removes the option to claim personal and/or dependency exemptions. Instead, filers are required to enter annual dollar amounts for things such as total annual taxable wages, non-wage income and itemized and other deductions. The new version also includes a five-step process for indicating additional income, entering dollar amounts, claiming dependents and entering personal information.
One way to manage your tax bill is by adjusting your withholdings. The downside to maximizing each paycheck is that you might end up with a bigger tax bill if, come April, you haven’t had enough withheld to cover your tax liability for the year. That would mean that instead of getting a tax refund, you would owe money.
If the idea of a big one-off bill from the IRS scares you, then you can err on the side of caution and adjust your withholding. Each of your paychecks may be smaller, but you’re more likely to get a tax refund and less likely to have tax liability when you fill out your tax return.
Of course, if you opt for more withholding and a bigger refund, you’re effectively giving the government a loan of the extra money that’s withheld from each paycheck. If you opt for less withholding you could use the extra money from your paychecks throughout the year and actually make money on it, such as through investing or putting it in a high-interest savings account. You could also use that extra money to make extra payments on loans or other debt.
When you fill out your W-4, there are worksheets that will walk you through withholdings based on your marital status, the number of children you have, the number of jobs you have, your filing status, whether someone else claims you as your dependent, whether you plan to itemize your tax deductions and whether you plan to claim certain tax credits. You can also fine-tune your tax withholding by requesting a certain dollar amount of additional withholding from each paycheck on your W-4.
A financial advisor can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
How Your Paycheck Works: FICA Withholding
In addition to income tax withholding, the other main federal component of your paycheck withholding is for FICA taxes. FICA stands for the Federal Insurance Contributions Act. Your FICA taxes are your contribution to the Social Security and Medicare programs that you’ll have access to when you’re a senior. It’s your way of paying into the system.
FICA contributions are shared between the employee and the employer. 6.2% of each of your paychecks is withheld for Social Security taxes and your employer contributes a further 6.2%. However, the 6.2% that you pay only applies to income up to the Social Security tax cap, which for 2022 is $147,000 (up from $142,800 in 2021). So for 2022, any income you earn above $147,000 doesn’t have Social Security taxes withheld from it. It will still have Medicare taxes withheld, though.
There is no income limit on Medicare taxes. 1.45% of each of your paychecks is withheld for Medicare taxes and your employer contributes another 1.45%. If you make more than a certain amount, you’ll be on the hook for an extra 0.9% in Medicare taxes. Here’s a breakdown of these amounts:
Source:
https://hellosafe.ca/en/tools/hourly-to-annual-calculator
https://smartasset.com/taxes/paycheck-calculator
https://www.thesalarycalculator.co.uk/hourly.php
