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Annualized Salary

An annualized salary is a pre-set amount of gross pay per month paid to an employee throughout the 12 months of the year, totaling an estimated yearly earning.   
An annualized salary is often used to budget for:
 
  • Full-time employees who won’t be working a full year (for example, school employees who don’t work over the summer, or employees who retire before the end of the year)
  • Part-time employees
  • Hourly workers
An example of an annualized salary is when a school teacher works in a 10-month position during the year, but gets paid biweekly even over the summer. This payment method ensures a regular paycheck is received throughout the year and also facilitates the equal distributions/deductions of taxes, insurance, and/or other employment benefits.

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