What's with telling YEARLY salaries?
I think this is mostly a US thing. Why use yearly salary? You're not paid once a year, are you? Most likely once a month. Referencing monthly salary makes much more sense.
"I'm making 50k". Great, now I have to guess - dollars? Monthly? Yearly? If yearly then what's the monthly paycheck? Net? Gross?
Lol who would hear "I'm making 50k" and think it's anything other than per year unless they just stepped out of a private jet...
I feel like this might be confusing only if you are under the age of 14 and have no idea how money or the world works...
You don't make 50k per week???
Lol. Agreed. It's not confusing.
People whose currency IS dealt in that scale.
For example, if you want to restrict it to English speakers, then anyone from Hong Kong would be flaunting a quite decent, but not millionaire, salary.
Depends on the currency.
Did you just assume my ¥der?
That was funnier than it should have been
The exchange rate is pretty good right now.
Not in basically all of the English speaking world. USD, CAD, AUS, Pounds, Euros, NZD. 50k a month or week or whatever you for some reason think it might be other than a year would be an insane amount of money to make.
I bet you're the kind of person that hates it when you ask the time and people respond by rounding it to the nearest 10 minutes...
Not really. It's usually obvious from context. Unless you're trying to be an intentionally obtuse pedant?
Thanks, captain Obvious
I know people who make 50k per month and don’t have jets. I make 30k p/m but I’ll get there one day. It’s crazy how when I was broke making $20/hour in a cafe that I thought everyone or most people are broke but now I’m making modest money it’s crazy how many other entrepreneurs are in my circle now. Just wow.
Lol this piss take xD
You have such a wild post history
I mean, you just basically answered your own question. People get paid hourly, weekly, every 2 weeks, monthly, and some even per sale (ie. Realtors) so the only way to have a constant measurement is yearly.
Why not monthly? It seems the smallest unit to encompass them all, and is fairly standard.
Monthly makes sense also since most bills are monthly.
Until you have people who get a yearly bonus. Or 13 or 14 monthly salaries a year, which is quite common in Germany (basically a bonus, but the employee is entitled to it).
Yes but a lot of work is seasonal and/or sporadic. Annual pay smoothes it out.
Most bills are monthly, most paychecks schedules are bi-weekly. To me this is the same issue as hot dogs and buns being sold in different quantities. Whyyyyyyyyyyyyyyy?!?!?!?!?!
Biweekly isn't a thing in many places in Europe, I think.
At every job I've ever had, I get paid every two weeks. So the amount I make per month varies.
Those months where three paychecks fall in them are pretty sweet.
I'd imagine that for some jobs (seasonal etc) there is too much variation in a month-to-month basis
But most pays are fortnightly
Not here (the Netherlands), everything is monthly, both pay and bills.
Same in Hungary. Not a single person I know gets their salary weekly or biweekly. It's absolutely not a thing.
Also, your bills are monthly. You mortgage is monthly. Your credit card bill is monthly. Preschool is paid monthly. Everything is monthly.
I get paid 4 weekly so get 13 pays a year.
Because that's the standard and that is the wage I negotiated and my bi-weekly checks are that number/26. I didn't negotiate a per-payperiod rate.
It's what my taxation is based on.
It's what all my credit applications ask for.
Also, what you make and what you take home are really quite variable based on circumstance between 2 people making the same base wage. Retirement contributions, health care premiums, taxes, and other deductions vary from person to person.
For salaried employees it's the standard metric by which wages are measured. You don't need to guess anything. That's the standard.
For hourly employees, that would be your hourly rate. Since hours can be variable and overtime is a thing your yearly rate would be variable too.
Seriously there's nothing to guess.
Where?
It's not standard for me. We only talk about monthly numbers with my colleagues and friends.
For the US, but going by this thread it's not limited to here.
Also, for what it's worth, I would think if op was in a place that used monthly as the standard they wouldn't have posted this complaint. If that's not the case I'm confused by the point of this post?
Bi-weekly is ambiguous, use fortnightly.
Very few people are paid twice a week.
Can't speak for the US, but here in Germany there often aren't 12 monthly salaries to a year. Many people get a Christmas bonus and/or a summer bonus, but just as many don't. Personally, I get paid about 13 1/4 monthly salaries a year, so telling you my yearly salary would be more accurate than the monthly amount.
Same in Italy
It's pretty standard in Europe too. It's what you see when filling your taxes, but very often people have bonuses, over-time, 13rd month and other things making monthly pay not relevant
The Thirturd month is my favorite month of the year
Stupid Smarch weather
What happened to one-teen?!
wait till you hear that in Italy we have 14
but only if you are lucky and it's heavily taxed.
Personally, I don't get paid every month, I get paid every two weeks, which means that some months I get paid twice and some I get paid thrice. Stating an annual value corrects for weird shit like this, and it's going to be consistent since it's probably how it is being tracked in the employer's accounting.
AnD wHaTs ThE dEaL wItH aIrLiNe FoOd? Am I rIgHt?
Many people in the US are paid every two weeks, which means some months you're paid more than others.
Yearly has become standard as is hourly rate, because one is useful for taxes and the other is often directly negotiated.
I've been paid every week, every two weeks, and twice a month (first and 15th or 15th and last).
I work OT as well, and it's feast or famine. I've had 30% of my yearly salary come from a little over two months where I worked 12/7s. Hourly rate doesn't really get that across.
Because your yearly income dictates your tax bracket.
This isn't how tax brackets work. Say we have 5%, 10%, and 15% in a system similar to the US with completely made up numbers. Say you make $99k, your first $33k will be taxed at 5% ($1650), your second $33k at 10%($3300), and your last $33k taxed at 15%($4950) totalling $9900. 9900/99000= a 10% effective tax rate. The real system is more complicated, but this is what it boils down to.
Nothing that I wrote conflicts with anything you said.
Being in Tax Bracket C doesn't in any way imply you arent in Tax Bracket A.
The point is, Tax Brackets, and Taxes in general, are based on yearly income, so thats what people largely measure by once you are above a certain pay grade.
You get taxed by the year, so many people quote their income by the year, because its a quick and simple indicator of wealth/status.
You wrote "it determines your tax bracket" inferring you'd be in a single bracket and this is an extremely common misconception with how our tax system works. Furthermore, your income is only part of the equation since your tax rate is also affected by deductions, exemptions, and credits making two people making the exact same income can be taxed at different rates.
For future reference. Anytime people are talking about "their tax bracket" in a progressive tax system, they are talking about the top level bracket.
It's typically redundant to, mid conversation, list all the tax brackets that exist under the one you're talking about.
The only people I've ever heard talking about "their tax bracket" are the types who refuse to take an extra hours at work because "it'll put me in a higher tax bracket and I'll actually earn less money than if I hadn't worked it at all" even though that's mathematically impossible.
Someone earning $44,726 will put them a whole dollar into the 22% tax bracket meaning they pay $0.22 more in taxes than if they'd stayed within the 12% bracket of $11,001-$44,725. Claiming "I'm in the 22% bracket" is completely meaningless, as evidenced with the above example, and ignores the fact that this person is much more likely to have an effective tax rate of around 12% or less. If you're only paying 12% of your income in taxes, why in the world would you say you're "in the 22% bracket?"
Naw dude... I know how tax brackets work.
Most folks who know how taxes work refer to their "tax bracket" inclusively with respect to both the point they are at as well as inclusive with all below
Because its impossible to be at the third tax bracket without logically also being in the first and second implicitly, it is redundant to include that.
Sorry mate but you are just coming across as pedantic here, or uninformed. Its quite normal to, colloquially, refer to the topmost bracket you are encroached into as "your tax bracket" singular, with everyone in the room understanding that is inclusive with all those below it.
I wont deny that there are a lot of people that think that going up a tax bracket means all their income is taxed at the new rate, which is always hilarious that people still think that in 2023.
But no, I assure you, I know how progressive tax brackets work lol.
In future we all expect you to list the average tax rate you are in and which two tax brackets that it lies between by calculating all the taxes paid and dividing by your gross wages then looking up the tax code to verify it has not changed. Please provide sources every time on your tax code.
You're just repeating the same thing you said in the last comment and ignoring everything I wrote. Nowhere did I say that you need to list every bracket. I said people don't talk about "their tax bracket" because that isn't a thing and that isn't their tax bracket. It's just a percentage that some potentially miniscule amount of tax that may apply to a further potentially tiny fraction of income and in no way represents how much they're paying in taxes.
It does actually, because if you are any amount into tax bracket n, you are already implicitly paying the maximum taxes of brackets 1 to n-1
For example in Canada, federal tax brackets are:
If I say I am in the third tax bracket, that already implicitly informs you of how much taxes I am paying for the first and second brackets, because by being in the third bracket I already am paying the maximum amount for brackets one and two. These are now fixed values implicitly.
If I am in the third tax bracket, you know I am paying at minimum $8003.85 + $10938.39 (the maximums of bracket 1 and 2 combined), and at most another $20,371 above that.
No more, no less, the "third tax bracket" is paying between $18,942.24 and $39,313.24 per year.
So yes, it is a specific and fixed "range" of taxes.
I can't tell if you're being serious - and so the world's biggest pedant, or if you're just the kind of person who can never admit they were wrong, even about something inconsequential, and aren't willing to admit you misread the top comment lol
I think you might be the only one that inferred that.
As others have mentioned, a few possibilities (I'm in the US, not sure how specific this is):
The tax point is probably the biggest one. People just want to know what tax bracket you fall into. And it corrects for seasonal variations.
Mortgages neither. Mine is accelerated bi-weekly, meaning I pay essentially 13 months a year... It shaves a wooping 3 and a half years on my 25 years!
I think it's probably one of those things that is stupid until you reach a point of financial success or fall into groups that consider your financial wealth important. Why it's a thing is probably because we pay our taxes once a year and that's when it's laid bare and you see how much you made. So after 10 or 20 years you kinda know what 50k a year is and if someone is talking about making that much you can understand the lack of money they have. If you friend tells you that, don't ask them out to expensive things unless you're going to pay the bill.
Is 50k per year below average in the US? Is it hard to survive on that amount?
It depends significantly on location and living situation, but 50k ranges from moderately comfortable all the way to poverty line.
To add to the other poster, in the USA we have calculators for these things.
There is lots of info available, but a short answer is:
Comparing that to where I live.
The median is about $37k per year.
On the other hand. I make around $13k, single household, studio flat close to the city center and I make do just ok. Wouldn't hurt to earn a bit more. But on the other hand I work a bit less than 50%. It's hard to find work though and inflation is making living harder.
If you have a family it's poverty wage.
Guess? It’s called math. You want to know monthly? Divide by 12. You’re mad that you have to do math? It’s a standardized number.
For yearly to hourly divide by 2 and lop off 3 zeros. $35/hour = $70,000/year (approximately)
I agree. And the reason why that math mostly works out is because there are roughly 2000 working hours a year. So you’re just dividing salary by 2000.
maybe tax related since taxes are based on annual income. if you are not hourly/salaried and you are self employed/freelance/contract your income will vary from month to month. annually seems like it can be more accurate across all those groups
I don't get paid once a month. I get paid every 2 weeks.
At a prior job, I got paid every week.
Yearly is a good baseline, and also helpful for taxes (which Americans have to do by hand because of tax preparers lobbying against the government doing it for us).
Where do they do it otherwise? In Australia it's also yearly.
People might also get bonus so in some sense you get paid once a year.
In Czechia, it's definitely normal to say salary per month.
Same in Poland, it's definitely more common to discuss monthly salaries. I had to adjust when moved to Germany, as almost everyone uses yearly base. Though I would say it makes sense considering yearly bonuses etc.
South Africa do it monthly
I can't even compare wages with my partner if we have to go by monthly rate.
I get paid per month, but in May I get an 8% bonus, so my monthly payment is not the same throughout the year. Then my partner gets paid every 4 weeks, and receives bonuses based on company performance in those 4 weeks. So every payment is different.
Per annum is the only way we can compare our salaries. And that's in the same country. Now try international, and it'll really difficult otherwise soon.
I live in the Netherlands.
In France we often have additional months paid, 13 or 14 months, as an additional pay check in June and December. The monthly pay doesn't account for that while the yearly one does. There are jobs also that have a variable salary depending on performance.
Yearly, because over here some people get 12 salaries a year,some 13, some 14 and some even 15.
The yearly income covers that and also includes yearly or semi-yearli boni.
In my country you collect 14 salaries. So yearly salary is just the only sensible way to compare internationally.
Please elaborate on the 14 salaries? I'm in Canada, I would guess at most I could claim 3. My occupation, the rebates I get from the federal government, and the rebates from the provincial one would amount to my 'income' each year.
They mean they get paid their monthly salary 14 times.
Why 14?
Edit: other parts of this thread make it clear months 13 and 14 are bonuses the employee is entitled to. Spain does not use a 14 month calendar.
Correct, they're 'bonuses'
My bad, I didn't get notified someone replied to my comment and only just checked. As mentioned below in this thread, I meant we get 14 monthly salary payments, where "months" 13 and 14 are less taxed and are tacked onto a summer and winter month as a holiday and christmas bonus, respectively.
$50k means $25/hr because people work 2000 hours per year.
That's a very good rule of thumb.
Speak for yourself Mr work-life balance 😀
It's not just a US thing. I've never actually thought of this until this post, but I'd think it's because taxes are done annually.
Your employer says they'll give you X amount a year, but you receive X-Y into your account. It's easier to talk about X, then to worry about how Y fluctuates.
It also makes it feel as if you're making more money. Raises for a year sounds better than when you divide by 12 and get the monthly.
Because you only get a bonus once a year. You say your compensation is "$xxx with a $xx bonus".
I used to think in terms of hourly salaries until I got older and got big money jobs that are in yearly salaries.
I think it comes down to the fundamental difference of salaried jobs vs hourly jobs. Hourly depends on when you're scheduled, how long. It's typically flexible schedules, typically student jobs or generally non-career jobs. So comparing compensation with the hourly rate makes sense. The tax rate varies, the pay varies, everything sort of varies. The only reliable metric there is your actual instant compensation.
When it comes to salaried jobs, it's usually a flat pay. Sometimes I'll do some overtime, sometimes I do less to compensate for the overtime. The actual hourly rate becomes less relevant, because the hourly rate varies a bit as a result. But also it's no longer a calculation of "I got X hours this week, I can pay for Y expense when I get my paycheck". I get paid the same every time, and I care more about whether I'll overdraft than really how much money I earn per hour. It stops being a useful metric to me. What's $2/h do for me? Can I afford a new TV with that? Then there's bonuses typically given as one time payments, lots of one time big expenses on the house. Maybe it cost me 2 months worth of salary and I'll pay it over 6 to make it work, but I can look back at the expenses in the year and have a good picture of my expenses overall.
In the end, taxes are yearly income, and a year is a decent period for spiky expenses to wash out. I earn X a year, I get taxed Y on it, my expenses were Z, and I have W savings that went into retirement. I don't really have a use for looking at my expenses weekly/bi-weekly/monthly.
Yearly salaries are assumed in local currency (so USD in the US, CAD in Canada), and the gross amount. Because my friend in Ontario might make the same salary as I do in Québec, but we're taxed differently, but we can still compare absolute compensation. Same in the US, it varies by state. You may have more or less deducted for various things, maybe you owe back taxes, maybe you owe child support, maybe you have a more expensive insurance plan, maybe you're throwing more in your retirement plan. But total gross yearly compensation is the same, and includes pretty much everything: tax returns, tax dues, bonuses.
Another example: I'm throwing a lot of money on my retirement account. In Canada, this is non taxable income. But taxes are taken out of your paycheck. So everything I put in an RRSP turns into an implied tax return which is once a year. I get less net income during the month, but higher net income with the tax return. The only accurate numbers are the overall net and gross yearly income.
As a freelance steadicam operator, my daily rate can vary between $2000 and $4000 per day (including my personal equipment rental). But I don’t work every day, far from it (especially during the current strikes) so a monthly rate is irrelevant. A yearly net revenue is a mettre measure.
Monthly income won't tell the whole picture for people who are freelancers. Some professions have specific seasons where they make a ton of money, and other seasons where they make a lot less.
Permanently Deleted
In Québec, the default frequency for being paid is every two weeks. Big salaries are mostly stated as yearly salary, while more menial labour is often by the hour.
I don't have an explanation, it's just what it is. But I heard over that being paid every two weeks was because people were so bad with money that they would starve every month, so they started paying us every 2 weeks instead. Go figure.
Two weeks (or weekly) is very common for people on hourly wages in most countries. Particularly those with overtime rules. It gets a bit confusing if you have a bi monthly pay and say overtime rate for any hours over 40 hour weeks. Your checks land on 14 to 15.5 days per monthly but your overtime may need to be calculated based on hours of a previous pay period.
I mean surely it's obvious in that example, no?
If that's the native currency wherever you are, then of course dollars
$50k/month about be $600k/year. Pretty sure you'd be able to tell if the person you're talking to made half a million dollars a year vs just above the poverty line (in the US at least) just from context, but when in doubt - it's probably safe to assume that the person you're talking to isnt in the top 1% of earners
Yearly divided by 12? If you're in a hurry and want a rough estimate just chop a number off the right and that'll get you to within ~10% of the correct value
I've literally never heard anyone give their salary as gross outside the context of financial planning, and even then they'll always specify "after taxes" or something similar.
Other comments go into plenty of detail about why they se various conventions are what they are (yearly vs monthly, net vs gross, etc(
You mean net here, not gross. Otherwise, agree.
Haha woops - mixed up the terms, thanks!
Makes it easier to figure out potential tax burden
I'm sure outside the US it's even more customary, annual salaries are to include all bonuses.
Generally we don't include bonuses in annual salaries in the US because a bonus is not always guaranteed and many fields won't have a bonus.
That was my thought too. In Tech we do the same because of total compensation. Stock (options), bonuses etc. have a yearly cadence.
Also some places have a 13th salary, so yearly makes sense there too.
large part of Europe also.
also yearly before tax, because employers do not need to know about other incomes and thereof how much money you pay in taxes. you can tell, but they don't need to know.
when they hire you, they don't know about your taxes, anyway. they put the ad, and if you're hired and have other incomes, you'll pay more taxes out of it.
yearly because taxes are paid yearly.
some people are paid weekly, some monthly.
so yearly becomes the comparison to help taxes and compare across the market which might pay at different frequency.
it helps account for your budget and their budget.
if you don't care about budgeting or calculate taxes, you make the math.
Often in the US we’re quoted yearly salaries by businesses for full-time positions. They will hire us for, say, $52k per year, and that will be given as $2,000 every 2 weeks. But then if we get a $500/yr raise, they don’t tell us what the new rate is on the paycheck: we have to log into the account and see the pay stub to know what our hourly rates and biweekly paychecks actually are.
Typically, it’s hourly quotes for part-time and often full-time salaried workers, and yearly quotes for full-time, especially salary exempt. Personally, I get a yearly quote, and have to look up my stub to see what the hourly or my two week gross are.
Divide your annual salary by 2080 hours/year for the hourly rate.
Because taxes are paid yearly. You tally your yearly income to file your taxes.
My income varies enough that the yearly total is a better picture than the last two or four weeks are.
In France, people are sometimes paid 13/14 months a year. It means you get two months as a bonus, so it’s relevant in this case to tell the yearly salary
True, and funnily enough french people don't use yearly gross. Most of the time they use monthly net, and, in the context of salary negotiations, will specify over how many months. E.g. "2000 net sur 13 mois"
In Spain it is also yearly. In general the annual salary is divided in 14 payments, unless you ask to have it divided by 12, depends on the employer, so it makes sense.
The income tax is also annual based. So depending how much you earned during the fiscal year you have a different tax rate. (And part of the income tax rate is dependent on the "state" but they are all more or less similar).
Because it's easier to compare yearly salaries. If you say “I’m making 50k” then I can assume it's yearly (if it's monthly then good for you, but that's overwhelmingly not the case). Otherwise you need to specify the pay frequency and do math.
Same with net/gross. I can assume your yearly salary is given in gross because net introduces a bunch of variables with tax rates based on location/deductions that makes it a fairly meaningless value to compare against. Not to mention your net monthly income may change in a year as you hit certain tax limits like the max social security tax limit.
Some people may also not have consistent monthly earnings so averaging income over a year gives a more accurate picture of average income.
Happens in germany too. A lot of people get a special salary at the end of the year, Christmas money if you will, and that also accounts into the yearly salary. If I earn 4K a month, I earn 48K a year, but if I get 100% christmas money, I earn 52K.
Salary is guaranteed, bonuses are not
It's a financial year not a financial month
*Fiscal
Maybe where you live :P
I live in corporate accounting.
What's up with yearly salaries not keeping up with inflation?
This must be very regional. Additionally, I’d bet a lot of this might depend on industry.
Someone who’s hourly might have fluctuations in their hours over a set period of time, like a month, or even week to week.
Seems like a number should always be coupled with a unit.
It's not as useful for day-to-day budgeting as a more granular one, but people generally only look at their finances closely once a year at tax time and so it's a good point of comparison for that; get a sense of how your financial life is evolving.
It's also the number you're asked for on tax forms, other financial forms (loans, financial aid, bank accounts), questionnaires (though you can lie or 'prefer not to say' on those)... comes up a lot, basically.
If you know the yearly, then that is the allotted amount in the company budget for you. So, in the big picture, you are being paid yearly. Especially if you are salary or contract. I have switched to making a yearly budget with monthly categories, and the yearly costs are much easier to factor into. My budget became more simplified and less stressful. Also, another benefit is that I save for an average cost that is usually higher than most months, and the high cost months are less troublesome to plan for.
I try to calculate net income: deductions and taxes removed from gross income. Overall, I feel better as I can plan ahead of time and don't need to do it every month. Still need to keep an eye on following the plan and for anything that changes it. I don't just plan it either, I execute it.
I think most answered your question with one exception. Dollars? What else you expect it in? Cats?
(Ignoring you will want it in the country of your residence)
In my last three jobs, I was paid weekly, then bimonthly, and currently every two weeks. Weekly and every two weeks is easy to convert, but bimonthly my pay would fluctuate slightly.
There are also yearly bonuses and similar that would not be included.
Wwll, I get 14 monthly payments a year, so two times a year the double amount, plus a yearly bonus, plus a fixed one time payment, so monthly would simply not represent how much i get yearly.
It's just a choice. It means nothing. Conventions are conventions merely because people started doing it that way. If you don't understand, then ask a question.
What exactly is your challenge here?
I think they were asking a question? There isn't a challenge they're doing exactly what you said to do in the correct place to do it lmao.
Aha. I see the confusion now. Oops.
I meant ask a question in response to someone saying "I make 50k", when they mentioned that now they have to guess.
My point is that conventions are arbitrary, different people use different ones, and when someone uses a different one to you, then simply ask to clarify. Then I wondered why this presents a challenge.
That's what I meant.
Ah that makes sense. I see a lot of comments seemingly replying to the wrong comment, I'm on kbin and the comments are pretty clear for me but maybe other instances they are still confusing. Sorry if it seemed like I was coming at you, the incorrect context made your comment seem incredibly hostile for no reason haha. Have a good one man
All good. Indeed, it seemed far more aggressive than I'd intended and utterly clueless once I read it again from that perspective.
Many US jobs are based off an hourly rate, some with overtime (usually not added in). I noticed other posters mentioned Xmas bonus. As an hourly worker I received a standard 3% yearly raise to cover increased costs of living. Because our cost of living increase was nearly double that, our salary actually declined. Oh and that Xmas bonus... If you count a 25$ gift card to Walmart a bonus...
Pretty shit, but it could be worse.
Federal Government can be nice because I'm salaried, but also get time and a half for OT, so I get the best of both worlds. On the other hand, we don't get performance bonuses, and our yearly COLA takes a literal act of Congress to decide on the percentage.
Generally the people you’re telling your salary are people in the same location as you or at least the same state.
Telling the yearly salary makes the most sense there since it should be similar weekly/monthly amounts. And even if they aren’t in the same place and it doesn’t translate based on tax differences, telling someone the monthly or weekly payment would make no sense.
In Australia we mostly get paid weekly.
Are we? I've only ever been paid fortnightly
Ive never not been paid weekly.
I thought pretty much everyone in Australia was paid fortnightly.
Monthly here...
Almost every job in my professional career in Australia has been monthly.
Yearly = professional job hourly = wage slave unskilled work
Or, hourly = extremely high paid contract work.
As a freelancer, I charge a high daily rate, even more complex measurements!
Yeah, I knew freelance folks who provided long term support with such complicated setups. The base daily rate plus hourly with a monthly retainer and weekly on call fees. Wild.
oh 🥹
That's reductive an wrong. There's a lot of skilled labor that's hourly.