How to Calculate Hourly & Commission Salary

by Chad Buleen; Updated September 26, 2017

When you apply for loans or credit, one of the things that those who will approve the loan want to know is if you have enough income to cover the cost of the loan. When you are paid by the hour or when you are paid a commission, you may not understand what the sum of your commission or hourly work is when speaking in terms of yearly salaries. You can use simple math to calculate these salaries.

Calculate Hourly Salary

Step 1

Write down or enter into your calculator the amount of money you earn per hour. Assume for this example it is $16.25 per hour.

Step 2

Multiply the amount in Step 1 by the number of hours you work in a day. Assume you work eight hours a day. Your daily income would be $130 ($16.25 x 8).

Step 3

Multiply the daily amount by the number of work days in a year. The average full-time employee has about 260 workdays per year. Your answer is your yearly salary. In this example, the answer would be $33,800 ($130 x 260).

Calculate Commission Salary

Step 1

Write the average amount of sales income you bring in for your business each pay period. Assume for this example you are paid every week. Calculating your commission salary is not an exact science because your pay depends on the amount of merchandise you sell. Taking the average amount of items you sell per week over the previous several weeks can provide a good baseline for your calculation. Assume for this example you sell $5,000 worth of merchandise each week.

Step 2

Multiply the amount of merchandise you sell per week by the commission rate your organization has established. For this example, assume your company pays those who bring in $5,000 worth of sales in a week a 10 percent commission. This means you would multiply $5,000 by 0.1 (10 percent). This equals $500.

Step 3

Multiply the result from Step 2 by the total number of weeks you work a year. A full-time employee who takes no vacation and no holidays off would work 52 weeks a year. Assume for this example that you work 50 weeks a year. The result of your commission in this example would equal a $25,000 salary (50 x $500).

Tips

  • If you earn an hourly salary and a commission, you would only need to calculate each salary separately and add them together. Continuing the same example, you would earn $58,800 in salary ($33,800 + $25,000).