Know your value and ask for a wage that matches it!
Your annual salary is how much you get paid each year before tax and other deductions. Most people know how much they earn. However, if you work for an hourly wage, you might not be 100% sure. It's important to understand how much your salary is and whether you're being fairly compensated. Read our guide to help you with this predicament.
What is the average annual salary in the UK?
Wondering how your salary stacks up to the national average? The median weekly wage was £640 in April 2022, according to the Office of National Statistics (ONS). That equates to an average annual salary in the UK of £33,280. Due to inflation, in real terms, that means that full-time pay fell by 2.6% between 2021 and 2022. We're all feeling the pinch.
Of course, it's important to remember that there are many different factors that can impact your earnings. Gender is a big one. The latest statistics show that the gender pay gap is now 8.3%. While the gap has been decreasing over the years, we're still a fair way off equality.
It doesn't end there. Other factors, including your age, race, education, and background impact how much money you make. For that reason, it's not always helpful to look at the national average salary and measure yourself against it. There may be things that are out of your hands that have held you back in this area.
What is important is whether the salary you have is enough to live on. The Living Wage increased by 10.1% this year and is now £10.90 an hour. Unsurprisingly, that figure is higher than the national minimum wage, which is now £10.42 for over 23-year-olds.
How to work out your annual salary
Not sure what your annual salary is? If you get paid by the hour, you may not know how much your yearly wage is. One of the things you can do is use an annual salary calculator to do the heavy lifting for you. However, calculating your annual salary is quite easy.
Start by multiplying the hours you work each week by your hourly wage. That will give you an idea of how much you make each week. You can then multiply that amount by 52 to give you the total annual salary for the entire year. Simple enough, right?
Of course, there may be some anomalies here. If the amount of hours you work each week varies, you should look at the average. On the other hand, if you occasionally work overtime (and get paid more for doing so), you'll need to factor this in.
It's important to note that your reported salary is before tax. When looking at your payslip, you should check out the amount you make before any deductions. You can use that number to do the maths when you're working out your annual salary.
How to know your value in the workplace
Think you're being underpaid? While money isn't everything, you need to get paid what you're worth. Here are some of the ways that you can check what your true value is:
Look at the market average for your position
One of the quickest ways to figure out whether you're getting paid enough is to look up the market average. A quick Google search will let you know how much other professionals are getting. That way, you can get an idea of the average salary for your specific role. If you're wildly underpaid for your work, you may want to negotiate.
Factor in your location and experience
Let's say that the average annual salary is higher than you're getting paid. You might jump to the conclusion that you need a raise. Hold your horses! As we've already covered, a selection of factors could influence how much money you make.
When you're determining whether you are getting a fair wage, consider your experience level and location. If you are new to the industry, chances are you'll be making below average. The same can be said if you live in a remote town, rather than a city.
Subscribe to some industry publications
The better you know your industry, the better you'll understand how much you should be paid. If there are sector-specific magazines, now's the time to subscribe to them. These publications will include information such as how much professionals are getting paid and job adverts. You can use these details to determine where you stand in the pecking order.
Consider the other benefits you get
Salaried jobs are a package deal. It's not simply about the money that you take home at the end of the month. What else are you getting out of this opportunity? Do you get a bunch of holiday days, for example? Are there loads of learning and development opportunities? Is there room for you to grow and progress? The way you're valued in the workplace is not always monetary. You need to consider what you're gaining here.
How to negotiate a higher annual salary: tips
If you've done the maths and come up wanting (more money), it's time to have a tricky chat. Negotiating a higher annual salary is not going to be easy. However, it's important that you value yourself enough to get what you deserve. With that in mind, here are some tips that will help you to have this potentially awkward conversation:
Arrange a meeting with HR
You need to go down the formal route when negotiating a higher annual salary. Simply telling your boss that you want more money won't cut it. Instead, you need to arrange a meeting with HR or - if there is no HR department - your manager. Ahead of the meeting, you should also let them know that it concerns your annual salary.
Do your research first
Research is everything when it comes to this negotiation. You need to have your ducks in a row. Not only should you state that you would like a pay increase, you also need to back up your point. Why do you think that you deserve more money? What evidence do you have? The stronger your case here, the more likely you are to gain a better annual salary.
Outline your duties and experience
Have your duties changed since you started this job? Perhaps you've gained more responsibilities without getting more money. If that's the case, be prepared to state it. Tell the HR rep or your manager how the scope of your job has grown. You may also want to focus on the experience you've had since you began your career. It's all about showing how you're more valuable now than you were when you joined the business.
Offer something in return
Okay, so you want a higher salary. What are you giving in return? While you may feel that you're being underpaid for your current position, you need to show your manager that you're worth your weight in gold. Having something to offer them is a smart way to do that. For instance, you may suggest that you take on extra responsibilities or admin tasks.
Prepare to answer hard questions
Talking about salaries can be tricky. The HR department or your manager will have some questions for you. The main thing they'll want to know is why you think you deserve a pay rise. You should be ready to answer that question. They may also be interested in whether you're applying for other roles. Make sure you know what to say if they ask this.
Don't expect an immediate answer
You've put forward your case. Let the waiting game begin. You shouldn't expect an immediate answer when it comes to this question. It's likely that your manager will need to confer with others before making the decision. But you can't wait forever. Ask them when you can expect to hear back and follow up if you haven't heard anything by that date.
Making sure you're getting a fair annual salary is vital. If it's been a while since you had a pay rise or you fear that you're underpaid, do something about it. In this guide, we've covered how you can work out how much you should get and negotiate a pay rise.
If your salary negotiations are fruitless, you may find yourself looking for a new role where your skills and experience are valued. Get off to the best possible start with a free CV review from our experts!