Employee compensation is one of the most important things in any business. Compensation planning is therefore crucial as it entails important things such as employee motivation and engagement, which allows them to perform with the drive and satisfaction that a business requires to produce top notch results. Compensation tools will help HRs to execute strategies that will see to it that every employee in an organization is well compensated. Use of the right compensation tools will also drive employees’ retention since the organization is able to reward them for hitting their assigned goals and developing their skills.

Paycheck calculators

Compensation calculators are some of the most common compensation tools in use in most businesses today. A calculator will help a lot in finding more information about a wage that is offered by a certain employer. With such a calculator, a job seeker is able to convert a stated wage into an hourly, weekly, biweekly, semi-monthly, quarterly or annually pay to determine if the pay is right for the kinds of skills and competencies they are bringing to the business.

Using a compensation calculator is very easy; just enter the dollar amount of the wage you wish to convert as well as the period of time that the wage represents. Enter the number of hour you intend to work in a week, and then click on the Convert Wage button. You should be able to see what your wage amounts to when you convert it to each of the common periodic terms.

Even though the calculator is quick and easy to use, it does not offer some of the advanced computational features such as retirement contributions, overtime wages and state and federal taxes. There are more advanced compensation tools though, that come with all the features one needs to determine their exact pay and all the deductions in any of the common periodic terms.

Why are they important?

Understanding one’s salary is important to most job seekers as they are able to determine the exact compensation they will get at the end of a specified period of time. The salary stated on the job offer letter may not give you an actual picture of exactly how much you will be earning on an hourly or yearly basis. It is important to understand your earnings well to be able to compare your salary to others in your filed as well as understand your commissions and benefits.

When trying to compare how much you are earning at the moment versus what a new job is offering, a workers compensation cost calculator can be of great help. It will also help you determine your hourly, monthly or annual salary, which can be hard to tell from just a stated figure.

Yearly wage calculators are therefore very important compensation tools for both employees and HRs. if for instance you are offered or you are offering an hourly wage; you can easily tell how much that will translate in a year, by trying to figure out how many hours an employee will be working per week.