Earn
How does salaried pay work?
How you receive your pay at work depends on the status of your employment with a company. You may either be a salaried employee or an hourly employee.
How does salaried pay work?
How you receive your pay at work depends on the status of your employment with a company. You may either be a salaried employee or an hourly employee.
If you are a salaried employee, you receive a fixed pay each month, which is calculated from the annual pay that you and your employer agreed upon.
Most, if not all, salaried employees receive benefits such as paid sick days and holidays but don’t receive overtime pay unless allowed by the employer.
If you are paid by the hour, you are only paid for the number of hours you work in a month, regardless of your workload.
Hourly employees are entitled to overtime pay for hours worked in excess of 38 hours per week, but don’t receive paid sick days and holidays. However, some companies also arrange a “time off in lieu (TOIL)” in exchange for overtime pay.
How is monthly salary calculated?
Salaried employees are paid a fixed salary and their gross monthly income is calculated by dividing their annual salary by 12.
For instance, if your salary is $50,000 annually, your gross monthly income is $50,000 divided by 12. This means that you can expect $4,166.67 monthly or $2,083.33 fortnightly.
However, the amounts above are still subject to taxes and, if applicable, medicare levy.
Hourly employees are paid a fixed rate for each hour they work plus overtime pay for hours worked in excess of 38 hours in a week. The overtime pay is calculated as 1.5 times the employee’s hourly rate for the first two or three hours, and double time thereafter.
This means that the monthly salary of hourly employees may change depending on the number of hours they work in a month.
To compute for the gross monthly income of hourly employees, you’ll need to use the formula below:
gross monthly income = hourly rate x hours worked per week x 52 ÷ 12
The wages received are also subject to taxes and medicare levy if the annual income exceeds the tax-free threshold amounting to $18,200.
RELATED ARTICLES
About the author
About the author
Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more
Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more
Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more
Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more
Salary
Employers scrambling to prevent workplace brain drain
As workplace managers face a swiftly evolving employment market that’s increasingly favouring the demands of white-collar employees and jobseekers, bosses are falling under mounting pressure to ...Read more
Salary
Unions back Albanese’s pledge to close gender pay gap
An electoral promise from Labor to make gender pay equity an objective of the Fair Work Act has been hailed as a “watershed moment” from industry peak bodies who have traditionally advocated for ...Read more
Salary
Coles asked to disprove $115m in alleged wage theft
One of Australia’s biggest supermarkets faces allegations that it underpaid more than 7,500 employees a total of $115 million. Read more
Salary
Gen Z left behind in progress to gender equality
Women under 25 may emerge from the pandemic in a worse financial position than when it began, new research has shown. Read more
Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more
Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more
Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more
Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more
Salary
Employers scrambling to prevent workplace brain drain
As workplace managers face a swiftly evolving employment market that’s increasingly favouring the demands of white-collar employees and jobseekers, bosses are falling under mounting pressure to ...Read more
Salary
Unions back Albanese’s pledge to close gender pay gap
An electoral promise from Labor to make gender pay equity an objective of the Fair Work Act has been hailed as a “watershed moment” from industry peak bodies who have traditionally advocated for ...Read more
Salary
Coles asked to disprove $115m in alleged wage theft
One of Australia’s biggest supermarkets faces allegations that it underpaid more than 7,500 employees a total of $115 million. Read more
Salary
Gen Z left behind in progress to gender equality
Women under 25 may emerge from the pandemic in a worse financial position than when it began, new research has shown. Read more
