How to accurately state my salary on the application?

Question

Hi!

I work in the entertainment industry and make an hourly salary, as I have for the past 3 years since I earned my undergraduate degree. I've noticed that many of the applications have sections where you need to provide your salary history. For example, HBS asks for your "base salary" and your "current salary" along with "other earned income".

My problem is that I get paid by the hour, and generally I'm guaranteed 40 hours a week since I'm on staff. However, I make time and a half for any overtime I do. How much overtime I do can vary a lot from month to month or even year to year.

I also just got a raise a couple months ago, making it harder to estimate my current yearly salary.

What is the best way to accurately portray my salary (hopefully without contacting my HR department)? I can use my taxes but then how much overtime do I put into my current yearly salary?

I want to be accurate since the schools do say if there's a discrepancy they have the right to withdraw an acceptance.

Thanks in advance! I appreciate any help I can get with this issue.

u0422811 · Answer

Just go with what is on your tax form and take your average hours worked per year times your new hourly salary to find out your estimated earnings for the new year. That should be sufficient.

bb · Answer

tax returns are the best route indeed. for this year, you can do a little financial modeling work. Look at all your deposits, that's your income to date. Then look at last year's deposits for October November and December and divide them by your hourly rate ( just hourly rate nothing more). That'll give you the number of hours you worked last year in those 3 months. Apply that number to your current rate add the deposits for this year and you got your income. unless you feel that your income this year will be significantly different than last year, I don't think anyone will have an issue if you couldn't perfectly predict the future. :wink:

all you have to demonstrate is that all of your calculations were done in good faith. the only other thought I have, is that if your income fluctuates significantly from year to year depending on how much overtime you worked, you can put down your salary as the total of your hourly rate times 2080 ( approximate number of hours in the year). That your base salary. The differential between which acclaimed in your tax returns and this number is your bonus/additional compensation. Good luck!

Sailorette · Answer

Yep, I concur with the previous poster. The most accurate information available is your reported income on each year's W-2, and if there's any discrepancy in a future background search (if your company did something like multiply hourly salary * 40 * 52 to calculate it or similar) it's very easy to support the number you provided.

To estimate this year's annual income, I am assuming you don't have ready access to your total number of hours worked each year or you would be defaulting to that. So I would take FY2009 total salary * the percentage of FY2010 you received that same salary, + FY2009 salary * raise % * the percentage of FY2010 you receive the new salary. As that isn't easy to follow in words, let's use numbers to illustrate:

FY2009 hourly salary: $20/hour
FY2010 hourly salary: $25/hour (for a 25% raise)
Total FY2009 compensation: $50,000

We'll say your raise was effective May 1st, so 1/3 of the year was at your old salary, 2/3 of the year at your new.

Your estimate would look like this:
$50,000 * 1/3 = $16,667
$50,000 * 1.25 * 2/3 = $41,667

$16,667 + $41,667 = $58,334 estimated FY2010 salary

This essentially relies on your working about the same amount of overtime as you did last year, but it should be the simplest calculation without needing to ask for an HR report or needing to get specific as to calculating time & a half for your overtime hours.

Hope that helps!

Sailorette · Answer

bb and I were typing at the same time on that one

If you want to mess with separating out the 1.5x hourly rate for the overtime worked his way will be more accurate, I just thought it would be easier to ignore that factor in the calculations. If you DO know something qualititative like 'you think you're working about half the amount of overtime you worked last year', you can always adjust for that. Best of luck with all your apps!

staind · Answer

While on the topic, does anyone know why schools request this information?

Sailorette · Answer

I believe they use it for a number of reasons. In the applications process it can provide further proof of an applicant's career progression as one often assumes that larger compensation increases are given to those individuals also taking on larger responsibilities. And it's used in calculating those rankings we all pore over that include which programs provide the largest salary jump post MBA

inspiredbychaos · Answer

Thanks u0422811, bb, and Sailorette! Your answers are a huge help.

skahuh · Answer

Based on this, one might conclude that a low pre-MBA salary could actually help in gaining admission, as the salary jump is likely to be more substantial.

My guess is that salary won't matter as much as other application elements, especially given the present economic climate.

thisguy310 · Answer

I work full time but also own my own small business. Would it be beneficial for me to sum up both #s together? Would you mark it separately? How would you recommend doing this

MBAbot · Answer

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How to accurately state my salary on the application?

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