How Many Work Hours in a Year? How to Calculate (2020)

how many work hours in a year

How Many Work Hours in a Year

Are you trying to determine how many work hours in a year?  Maybe you want to convert an hourly employee to salary.  Or, calculate a salaried employee’s hourly rate for partial payment? The number of working hours and wages vary from country to country. The formula to determine working hours in a year is straightforward. However, it is not as simple as adding up how many hours an employee works each week. You also need to account for how many vacation days and holidays the employee receives in a year.

Basic formula for how many work hours in a year:

  • Multiply the number of work hours per week by the number of weeks in a year. For example, a typical work week is 40 hours and a normal year is 52 weeks. 40 x 52 = 2080.  That makes 2,080 hours in a typical work year.

There are 2080 work hours in a year based on a typical 40 hour work week multiplied by 52 weeks in a year.

What is a Work Year?

Working hours in a year and a work year refer to much the same thing.

The process is the same as above to figure out how many hours are in a work year.  Again, multiply the number of work hours in a week by the number of weeks in a year. In the USA, a typical full time work week is 40 hours, and the typical year has 52 weeks. That makes 2,080 hours in an average work year.  However, not all employees work 40 hours. Some full-time employees only work 35 hours a week, which comes to 1,820 hours per year.  Many part-time employees only work 20 hours less in a week.  A 20 hour work week would result in 1,040 working hours in a year

How Many Work Hours in a Month? 

There are basically two ways to calculate the work hours per month.

  • 40 Hour Week x 4 weeks – With full-time employees, you should assume one employee will work a 40 hour workweek.  A quick and easy method of calculating monthly hours is to multiply 40 hours per week by 4 weeks, yielding 160 hours for the month.
  • 40 Hour Week x 52 Weeks per year/12 months – The other method will provide the average number of work hours in a month.  We know there are 40 hours per week, 52 weeks per year, and 12 months per year.  So, the calculation is 40 hours per week x 52 weeks per year / 12 months per year = 173.33 average monthly hours.

Now compare the two methods and results. Method 1 figures 160 hours per month, and method 2 shows 173.33 hours per month.  The values are different by 13.33 hours.  The first method is quick and simple, but most months have more than 4 weeks, or 20 working days.  The second method is more accurate.  It takes into account the number of hours worked on a yearly basis and then averages those hours for a monthly result.  

Why Calculate Salaried Wages in Hours

Full-time employees can be paid by the hour or on salary.  If your employees are paid by salary, it can still be useful to calculate the number of hours worked.  It can help you to evaluate and allocate your financial liability. Establishing the correct number of hours allows you to assign an hourly wage that includes the cost of benefits such as health insurance and paid time off. Just add an employee’s pay and the cost of their benefits together.  Then, divide that by the number of hours worked to see how much it costs you per hour to employ that person. Or, you might need to determine how many hours are worked by all your employees for project management estimates or productivity goals. The most accurate wat to do this is to establish how many hours each employee works.

Converting Hourly Workers to Salary 

If you know the reasonable hourly rate for your employee, it’s simple to calculate an annual salary. This type of calculation is especially helpful when you are converting an hourly wage earner to a salaried position. It’s also helpful when you are considering transitioning an independent contractor – typically paid by the hour – to a salaried position with your company.

Reasons for Hourly to Salary Conversion

There are several reasons why you might need to convert an employee to a salaried job. One reason would be if you engage the services of an independent contractor.  To offer full employee status, you would want to consider what you are currently paying the consultant per hour.  Then, you can determine an annual salary. Or, you might have an hourly, part-time employee transitioning to a full-time, salaried position.  You would first consider the part-time hourly rate and then calculate the employee’s new salaried amount.

You should always review the Fair Labor Standards Act (FLSA) whenever you convert an hourly employee to salaried pay. There are federal laws that govern the classification of salaried employees. Most salaried employees are exempt from the government’s overtime pay regulations.  Merely converting from an hourly rate could violate FLSA guidelines.

Calculating Full-Time Hours per Year

Of course, most people don’t always work five days every week.  They usually have some holidays and vacation days that should not be overlooked. When calculating full-time hours, you might want to subtract these hours from the total work hours.  This provides a more realistic figure for how many hours an employee will actually be working. For example, let’s consider a person who works 8 hours a day, but gets 8 holidays a year and 12 vacation days.  In this case, you would subtract 160 hours from the total 2,080 work hours per year.  The result shows that the employee actually works 1,920 hours per year.

What is Full Time? 

The answer is not quite as simple as it sounds. The Fair Labor Standards Act (FLSA) has no definition for part-time or full-time employment.  Different employers may determine their own definitions. However, according to the IRS, for purposes of the Affordable Care Act (ACA), the following definition is used:

A full-time employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month.

Full-time employees who stay with your company for at least 12 months aren’t the only ones that might need an hourly breakdown. Some companies have full-time temporary or seasonal jobs.  For example, an accountant who hires additional workers to help during tax season. Other companies might have part-time workers who occasionally work full-time hours.  This can happen when filling in for sick or absent employees.  Part-time workers can get bumped up to 40 hours per week in these types of situations. Depending on the reason, you might need to include these other forms of full-time hours as well.

National Standard for How Many Work Hours are in a Year

You can also base your employees’ pay on the national standard for full-time workers.  The national standard is 2,087 hours per year, according to the U.S. Office of Personnel Management. This average figure is based on the  number of hours full-time employees work – 40 hours a week for 52 weeks, that’s 2,080. However, not every year is the same.  For example, leap years have 366 days.  Also, some years have more or fewer pay days than average because of the way weekends fall on the calendar. In 1985, the US Government set the annual full-time standard as 2,087 hours to accommodate for differences in the calendar year. That doesn’t mean you must use that number when figuring how many work hours are in a year.  But, you can use it if you like.  It’s how the US Government calculates it.

To be even more accurate, perhaps even to an annoying degree, 2087 hours would take into account leap years. While ideal, this is, of course, unrealistic because it doesn’t take into account any of the time off that employees will expect to receive throughout the year. 2000 is a bit more reasonable, taking into account the 10 national holidays, but it still leaves no room for vacations, or sick, emergency, and pregnancy leave. 1920 would be even better, as it leaves room for not only two weeks leave for holidays, but also 2 weeks to fulfill any other needs for time off. Something even lower, like 1860, could also be used to take into account more of the variables listed above. publicspendforum.net

Adding Overtime and Subtracting Time Off 

If you want to know the exact number of hours worked in a given year, you should subtract for vacation time, sick leave and other days spent away from work. For salaried employees, these days are generally paid, so you may want to just count them along with other days worked. If these days are unpaid, they can be subtracted from total work hours by deducting eight hours for each vacation and sick day. For example, if you were away from work for 10 days of vacation, subtract 10 times 8, or 80, hours from your annual total.

You should also add in overtime hours that exceed your usually scheduled work hours. This may be because your workload is seasonal, with some times of year requiring extra hours. So if you work 10 extra hours per week for four weeks, you would add 10 times 4, or 40, extra hours to your annual total.

Calculating Actual Work Hours 

If your work part-time or have irregular work hours, you may want to track your time using an app, online tool or a spreadsheet on your computer. Track either the start and end time for each day of work or the amount of elapsed work time. If your hours are somewhat the same from month to month, you can track your hours for a month and then multiply the result by 12 to come up with your estimated annual salary.

When you’re tracking your time, you may find that it’s tedious to figure your exact hours worked because hours are tracked in 60-minute intervals. There are time card apps and websites that do this calculation for you and return the number of hours worked in decimal format. For example, if you started work at 8:35 and stopped at 12:15, the number of hours worked would be returned as 3.67. Adding the hours for a week and month is much easier when totals are in decimal format. (Source: sapling.com)

$100,000 per Year is How Much an Hour?

$100,000 Salary with Two Weeks Unpaid Time Off

As a simple baseline calculation, let’s say you take 2 weeks off each year as unpaid vacation time. Then you would be working 50 weeks of the year, and if you work a typical 40 hours a week, you have a total of 2,000 hours of work each year. In this case, you can quickly compute the hourly wage by dividing the annual salary by 2000. Your yearly salary of $72,000 is then equivalent to an average hourly wage of $50 per hour.

Want to reverse the calculation? Start with the hourly wage and answer the question:  50 dollars an hour is how much a year?

What if you get 2 weeks of paid vacation, or you take no vacation time?

Now let’s consider the case where you get paid $100,000 a year, but you get 2 weeks of paid vacation. You get the same result if you work all year with no vacation time. In the previous case, we assumed 2 weeks of unpaid vacation, so your total year consisted of 50 weeks. But if you get paid for 2 extra weeks of vacation (at your regular hourly rate), or you actually work for those 2 extra weeks, then your total year now consists of 52 weeks. Assuming 40 hours a week, that equals 2,080 hours in a year. Your annual salary of $72,000 would end up being about $48.08 per hour.

What Is a Man-Year? 

A man-year, or person-year, is a unit of measurement for the amount of work done by an individual throughout the entire year, expressed in the number of hours. The man-year takes the number of hours worked by an individual during the week and multiplies it by 52.

How Man-Years Work 

The man-year may be may be calculated differently for various industries or organizations.  In general, the calculation includes the average number of hours worked each week.  This is multiplied by the number of weeks worked per year.  Deductions are then made for official holidays, vacation, and time off. The U.S. Postal Service calculates a man-year on a straightforward basis – 40 hours per week x 52 weeks, or 2,080 hours. The Office of Management and Budget (OMB) of the executive branch sets 1,776 hours as a person-year, allowing for holiday time.

Calculating the man-year will depend on each company and their own uses for the measurement. The pure definition of a man-year typically excludes not only holidays, but also break time during the workday for lunch, 15-minute breaks, and other kinds of time off. As a result, the man-year should only reflect actual hours worked or labored. (Source: investopedia.com)

What is a Person Year in Scientific Studies?

When scientists perform certain types of prospective studies they measure that time in person years or person months.  Prospective studies are studies that follow a large group of people over time. Person years and person months are types of measurement take into account both the number of people in the study and the amount of time each person spends in the study. For example, a study that followed 1000 people for 1 year would contain 1000 person years of data. A study that followed 100 people for 10 years would also contain 1000 person years of data. The same amount of data would be collected, but it would be collected on fewer people being studied for a longer follow-up period.

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