How to calculate the real hourly wage?

Calculating your real hourly wage requires considering both income and expenses related to your job, not just your gross income. Here are the steps involved in determining your real hourly wage:

1. Calculate Gross Income: Determine your gross income per pay period. This includes salary and any additional payments like bonuses.

2. Count Work Hours: Calculate the total hours you work, including extra hours not typically accounted for in your contract, like additional home work, commuting, and preparation time.

3. Include Additional Costs: Add costs directly related to your job, such as commuting expenses, uniforms, meals during work hours, and any job-related materials you pay for out of pocket.

4. Consider Unpaid Breaks and Off-Job Time: Include unpaid breaks and any decompression time needed after work that affects your personal time.

5. Subtract Job-Related Expenses: Take the total of your job-related expenses from your gross income to find the net income you actually bring home due to your job.

6. Divide Net Income by Total Hours: Finally, divide your net income by the total hours committed (working + extra) to find your real hourly wage.

This approach gives you a more comprehensive understanding of how much you are genuinely earning per hour, considering all factors, not just the time you spend at work. It can be eye-opening, revealing that the effective hourly wage is often much lower than the gross pay per hour suggests 1.