What's with telling YEARLY salaries?

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...

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.

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.

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.

Except plenty of people don't get paid monthly? I've been paid weekly, every other week, twice a month. I've been paid daily, I've also been paid per project. Once I was paid whenever i asked. Focusing on yearly salaries offers a convenient reference point.

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.

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

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.

“I’m making 50k”. Great, now I have to guess - dollars? Monthly? Yearly? If yearly then what’s the monthly paycheck? Net? Gross?

Unless you just stepped of your alien spaceship and have never interacted with societal conventions before, these are all fairly consistent. If you're in a country, you're almost certainly getting paid in the local currency. Annual pay is typically listed for various reasons though tradition is a big one, your pay period will also be specified whether monthly, weekly, two weeks, or whatever, and it's listed before taxes since the business has no clue what your personal income tax looks like.

And on the contrary, what makes sense about monthly that doesn't about yearly? I don't get paid monthly, and years to 2 week pay periods is far easier than months to 2 week pay periods.

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.

Because your yearly income dictates your tax bracket.

As others have mentioned, a few possibilities (I'm in the US, not sure how specific this is):

• Payment isn't always monthly, it is often every two weeks. So sometimes you get two paychecks in a month, sometimes you get three.
• Compensation isn't just salary, even if you're salaried. Bonuses, stock grants, etc. might be done yearly/every 6 mo./every quarter.
• Expenses aren't always monthly. If you own a place, you probably pay property tax which isn't due every month AFAIK. If you budget for vacations, holiday travel, etc., these are costs that vary wildly month to month, but have some stability on a yearly basis.
• ETA: taxes are based on annual income, too.

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.

"I'm making 50k". Great, now I have to guess - dollars? Monthly? Yearly? If yearly then what's the monthly paycheck? Net? Gross?

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.

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.

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 my country you collect 14 salaries. So yearly salary is just the only sensible way to compare internationally.

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.

$50k means $25/hr because people work 2000 hours per year.

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.

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.

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.

"I'm making 50k". Great, now I have to guess - dollars? Monthly? Yearly? If yearly then what's the monthly paycheck? Net? Gross?

I mean surely it's obvious in that example, no?

dollars

If that's the native currency wherever you are, then of course dollars

Monthly? Yearly?

$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

If yearly then what's the monthly paycheck?

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

Net? Gross?

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(

Permanently Deleted

Makes it easier to figure out potential tax burden

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.

I'm sure outside the US it's even more customary, annual salaries are to include all bonuses.

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.

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.

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.

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.

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

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.

It's a financial year not a financial month

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.

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.

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)

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.

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.

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?

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.

Yearly = professional job hourly = wage slave unskilled work