At Remitly, we know how important it is to be smart about your finances. Part of your financial health is understanding the amount of money you’re making, so you can create a budget, plan for long-term financial goals, and be prepared for unexpected expenses. Many Canadian workers who are paid hourly might wonder, “What is my annual salary?”
In this guide, we’ll provide a clear, simple formula for converting your hourly wage to an annual salary in Canada for 2025. This conversion can be used to help you compare job offers or better understand your finances. We’ll also go over different factors to consider, like holidays and unpaid leave, and how to use this information to your advantage so you can thrive in Canada.
The simple formula for hourly to annual salary
Understanding your annual salary matters, whether you’re in full-time work, a freelancer, or a student working part-time.
In order to convert your hourly wage to an annual salary, you can follow a simple standard formula:
(Hourly Rate) x (Hours Per Week) x (52 Weeks Per Year) = Estimated Annual Salary
For example, imagine you work a job where you earn $20 per hour. You usually work about 40 hours per week. Here’s how you’d calculate your estimate annual salary from that information:
- $20/hour x 40 hours per week = $800 per week
- $800 per week x 52 weeks per year = $41,600 per year before taxes
This calculation works regardless of how much you’re earning. However, it works best when you have a steady schedule that is more or less the same each week. This allows you to anticipate the number of hours that you’ll work each week for the rest of the year. If your schedule changes week to week, try to use the average number of hours you typically work in a week for this calculation.
Factors that affect your annual salary
Although this simple formula is a great start, real-life factors can change the final number coming into your bank account each month. Aside from any fluctuations in the number of hours you work each week, other factors can affect the calculation. Here are some things to consider as you’re calculating your estimated annual salary.
Overtime pay
There may be some situations where you’ll be making more per hour than your base pay. In Canada, overtime is typically calculated at 1.5 times the regular rate after a certain number of hours. This threshold varies by province, so check in with your employer, human resources team, or local government to understand how overtime works in your specific area.
If there’s a possibility that overtime will affect your annual salary projection, you can use the same formula to calculate how much money you’ll make for overtime hours only. Then, just add this sum to your base salary.
For example, let’s continue with the scenario of an employee who works 40 hours per week at $20 per hour. If this employee typically works about one hour of overtime per week, we’d do the following calculations:
- $20/hour x 1.5 overtime rate = $30/hour
- $30/hour x 1 hour per week = $30 per week
- $30 per week x 52 weeks per year = $1,560 per year before taxes
- $41,600 base salary per year + $1,560 overtime per year = $43,160 per year before taxes
Statutory holidays
Canada has national holidays as well as provincial statutory holidays. If there are weeks where you have unpaid holidays, make sure to subtract these from the total. However, paid holidays typically do not reduce the total estimated annual salary that you can expect to receive each year.
If necessary, your employer can provide you with a list of statutory holidays and whether or not they are paid or unpaid.
Vacation and unpaid leave
Paid vacation time is typically considered part of your overall compensation at a job. This is because it allows you to take time away from work without reducing your total annual salary.
On the other hand, unpaid leave, if taken, will reduce the total annual income you’ll take home. If you’re looking to account for these days in your calculations, you’ll have to estimate how many unpaid leave days you’ll use in a year. For example, you might estimate five days or the equivalent of one business week. To work this into your calculation, you’d multiply by 51 weeks as opposed to 52 weeks.
Taxes and deductions
When you’re using the formula provided in this guide, you’re calculating your gross income. This figure represents the total amount of money you earn before any deductions, like taxes or retirement contributions.
In Canada, there are common deductions like the Canada Pension Plan (CPP), Employment Insurance (EI), and income tax. These deductions will reduce the final amount that you take home—this is called your net salary.
Quick conversion chart: hourly to annual
If you’re considering taking up work in Canada that is compensated hourly, you can use the chart below to make a quick comparison of different wages. This table shows some common hourly wages and how they convert to annual salaries. It is based on a 40-hour work week, which is standard in Canada.
| Hourly Rate | Weekly Pay | Gross Annual Salary |
| $17 | $680 | $35,360 |
| $20 | $800 | $41,600 |
| $25 | $1,000 | $52,000 |
| $30 | $1,200 | $62,400 |
| $35 | $1,400 | $72,800 |
Remember, the possibility of working overtime could increase your weekly pay and gross annual salary, while the actual amount you take home each month will be less than the figures shown above after any deductions. In addition, allowances for paid leave and vacation time should be considered as part of your compensation package.
Why knowing your annual salary matters
Understanding how your hourly wage translates annually is empowering information. Using the provided calculation is the starting point for greater financial security and freedom.
- Budgeting with confidence: Knowing your annual salary helps you create a stable monthly budget, allowing you to anticipate recurring costs, plan how to use your disposable income, or grow your savings. Working with a monthly budget will allow you to move towards long term financial goals, like creating an emergency fund, furthering your education or skills, or purchasing a home.
- Applying for loans: If you need a loan, like a mortgage or a car loan, most lenders will ask for information about your annual salary income. Having this figure at the front of your mind will help streamline the loan application process and project financial confidence.
- Negotiating salary: Understanding the hourly-to-annual conversion can empower employees to negotiate their pay more effectively. With this information, you’ll be able to compare your earnings to industry standards and possibly even negotiate for a raise.
Plan your finances with clarity
If you’re working a job that pays hourly in Canada, converting your wage to an annual salary is a straightforward process that provides a powerful overview of your financial standing. Seeing and understanding your projected potential earnings for the year can help you compare different job offers, develop a personal budget, and consider investments and long term financial goals.
Remember that while the conversion from hourly to annual salary is quite straightforward, considering other factors such as overtime and taxes will help you get the most accurate figure. As this year comes to an end, consider calculating your annual salary to serve as the foundation for strong financial planning for 2026.
We know that every penny counts, especially if you’re new to Canada or sending money back home to loved ones. Knowing your annual salary is the first step and the simple calculation won’t take you long.
FAQ
How do I calculate my annual salary from my hourly rate in Canada?
In order to convert your hourly wage to an annual salary, you can follow a simple standard formula:
(Hourly Rate) x (Hours Per Week) x (52 Weeks Per Year) = Estimated Annual Salary
Remember that this calculation will tell you your total salary, before any deductions, so will be higher than the actual amount of money you receive in a year.
Does this calculation work for part-time jobs?
Yes, this formula will work for part-time jobs as long as the number of hours you work per week is relatively constant. If you work more than one part-time job, use the calculation for each one and then add the estimated annual salaries together to get a yearly overview of your total annual salary.
What is the difference between gross and net annual salary?
Gross annual salary is the total amount of money you earn per year before deductions, like taxes, are considered. Net annual salary is the actual amount of money you receive after deductions. It is sometimes also referred to as your “take-home pay.”