I know the title may sound like a misnomer, but there is a way you can get a raise without asking your boss, talking to HR, or really doing anything – it is taking all the vacation days you’re entitled to.
The average American worker leaves almost 7 days of vacation unused each year. Not only could that go to waste (some companies don’t allow you to carry vacation over), but you are not taking advantage of a huge part of your total compensation.
Vacation is Compensation
If you are an employee, vacation is factored into your compensation plan. If you don’t take all of your vacation, you are basically leaving money on the table. Let’s break it down. I assume that you get two weeks of vacation total, but I will run three scenarios for you.
If you work 40 hours per week for 52 weeks per year, you 2,080 hours per year. If you make an annual salary of $50,000, you basically get paid $24/hour.
Now, if you work the same 40 hours per week, but only work 51 weeks (you take a week of vacation), you only work 2,040 hours. At the same salary as above, you just got yourself a $0.50 raise to $24.50 (which is actually 2% more – not as bad in percentage terms).
Finally, if you work the same 40 hours per week, but cut it down to 50 weeks (assuming you take your full two weeks off), you work 2,000 hours. That lands you at $25 per hour, a whole $1 more per hour than not taking any vacation (and in percentage terms, 4% more).
So, by not taking your full vacation, you are essentially giving yourself a 4% PAY CUT. Why would you do that to yourself?
Taking Vacation is Hard To Do
You may argue that taking a vacation is hard to do because of what your job entails – you’re needed for whatever reason, or whenever you leave, things fall apart. Well, that may be the case, but if you’re so needed, why are you getting paid LESS to go to work than to take a vacation?
If you still find it difficult, maybe you should consider not going all at once, and spreading your days out. If you get two weeks vacation, that is 10 business days. You could use each of those 10 days to give yourself a long weekend by taking a Friday or Monday off. You could even get more creative and combine it with an existing holiday, and get a 4 or 5 day weekend. Now, nobody is going to fault you for taking a long weekend?
Whatever the case, you should be focused on maximizing your multiple income streams, and for most people the biggest income stream is working. As such, make the most of it, and get paid to the fullest!
Readers, what are your thoughts on taking all your vacation? Are you taking it all, or falling into the vacation pay cut trap?
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In my case, I always make sure I don’t forget a day of vacation unused. It’s your right, take advantage of it.
Good points here. I once made the mistake of leaving vacation on the table, and I don’t think they cared either way. It’s not like it’s impressive to do; rather, it prevents one from decompressing and/or simply dedicate time to other fun things. Take your vacation, you need it. And, to your point, you’re working for less if you don’t.
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I respect the math! Also, I haven’t left vacation on the table yet, but only because work rolls it over from year to year – so I’ve got some extra, heh. So this year? It’s an even bigger raise!
Oh, I always take all of my vacation, and I’d happily take other folks’ too if only they could donate it to me
I love traveling, and while I am the only person who does many of the things I do at work, I don’t think anyone is really so indispensable that a company can’t do without them for a week…or three or four. Plus you get rest and relaxation, and people appreciate you more when you come back
You are right. I have a friend who is British. He tells me one thing that will keep the US ahead of Europe economically is our productivity, including the amount of vacation we get compared to Europeans. We may not get as much, but taking what we are allowed is worthwhile, even if only staying home!
I am very good for taking my vacation. We usually do one big trip a year. In a couple a weeks we are heading to Africa. I am very excited. To me I deserve the break and life is too short to not enjoy it.
Robert, definitely an interesting perspective. I guess in turn you could also say that you should maximize all benefits in order to get your full salary. That means contributing the max to a 401k that has a match and maxing out HSA plans, etc.
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I will surely be taking all of my vacation. If you don’t take it all, you can carry over some time from one year to the next.
Even when you stay at home, if you use those days to do some research to find a long-term investing strategy that fits your skills, available time and attitude towards risk, you will benefit the rest of your life that you took the holiday days.