What is your annual income?
The example provided is for service providers who charge an hourly rate:
Your annual income is an estimate of how much you think you will earn in a year. This is used by the insurers to measure how much risk they are taking on and is common practice in the insurance industry.
You will need to think about:
- how many hours you will work per week,
- how many weeks of the year you plan to work and
- how much you plan to charge your clients (your hourly rate).
An easy way to estimate how much income you expect to make per year is:
- Estimate the number of hours you plan to work a week
- Estimate the hourly that you plan to charge your clients
- Multiply the number of hours by the hourly rate to get your estimated weekly earnings
For example:
Assuming an hourly rate of $45/hour and that you work 25 hours a week, this would equate to a weekly income of:
25 hours x $45 = $1,125 per week income
To convert your weekly income to your annual income, multiply your weekly income by the number of weeks you plan to work.
$1,125 x 50 weeks = $56,250 annual income
Remember this is an estimate, if anything changes you can always call your insurers and notify them of your change in estimated income.
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