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The following scenarios illustrate how the application calculates annual salary and annualized full-time salary. The scenarios use standard working hours, worker's working hours and full-time equivalent (FTE), salary amount, annualization factor, and frequency.

This topic lists the common assumptions and calculations for the following three scenarios:

• Worker's hours equal the standard working hours

• Worker's hours are less than the standard working hours

• Worker's hours are greater than the standard working hours

## Assumptions

All of the examples assume the following:

• Legal employer standard working hours per week is 40.

• Currency is US dollars (USD).

• FTE is calculated by dividing the worker's working hours per week by the standard working hours per week.

• Annualization factor for hourly workers represents the Legal Employer Standard Working Hours per Week x Weeks per Year.

The standard working hours, working hours, and FTE come from the worker's employment record. You can view it using the Manage Employment task in the Person Management work area. The annualization factor and the frequency for the salary come from the salary basis associated with the worker's salary record.

## Worker's Hours Equal the Standard Working Hours

The following table shows the inputs for this scenario for an hourly rate:

Calculation Input

Value

Worker's standard working hours

40

FTE

1

Annualization factor

2080

Base Pay

15 USD

Calculation:

• Annual salary: 15 x 2080 = 31,200 USD

• Annualized full-time salary: 15 x (2080/1) = 31,200 USD

## Worker's Hours Are Less Than the Standard Working Hours

The following table shows the inputs for this scenario for an hourly rate:

Calculation Input

Value

Worker's standard working hours

20

FTE

0.5

Annualization factor

2080

Base Pay

15 USD

Calculation:

• Annual salary: 15 x 2080 x 0.5 = 15,600 USD

• Annualized full-time salary: 15 x (2080/1) = 31,200 USD

The following table shows the inputs for this scenario for a monthly rate:

Calculation Input

Value

Worker's standard working hours

20

FTE

0.5

Annualization factor

12

Base Pay

5,000 USD

Calculation:

• Annual salary: 5,000 x 12 = 60,000 USD

• Annualized full-time salary: 5,000 x (12/0.5) = 120,000 USD

The following table shows the inputs for this scenario for an annual rate:

Calculation Input

Value

Worker's standard working hours

20

FTE

0.5

Annualization factor

1

Base Pay

50,000 USD

Calculation:

• Annual salary: 50,000 x 1 = 50,000 USD

• Annualized full-time salary: 50,000 x (1/0.5) = 100,000 USD

## Worker's Hours Are Greater Than the Standard Working Hours

The following table shows the inputs for this scenario for an annual rate:

Calculation Input

Value

Worker's standard working hours

48

FTE

1.2

Annualization factor

1

Base Pay

20,000 USD

Calculation:

• Annual salary: is 20,000 x 1 = 20,000 USD

• Annualized full-time salary: 20,000 x (1/1.2) = 16,667 USD