Legal Definitions - per annum

Per annum is a Latin phrase meaning "for each year" or "annually." It is commonly used in legal, financial, and business contexts to specify that something occurs, is calculated, or applies on a yearly basis.

Here are some examples illustrating its use:

• Example 1: Employment Compensation

  An employment contract might state: "The Chief Financial Officer's base salary will be $250,000 per annum, in addition to performance bonuses."

  Explanation: This means the CFO's annual salary, before any bonuses or deductions, is $250,000 for each full year of employment.

• Example 2: Lease Agreements

  A commercial property lease could specify: "The tenant shall pay a rental fee of $48,000 per annum for the premises, payable in monthly installments of $4,000."

  Explanation: This indicates that the total rent due for the property over a full year is $48,000, even though the payments are broken down into smaller, regular amounts throughout the year.

• Example 3: Investment Returns

  A financial report might describe an investment's performance: "The mutual fund has achieved an average return of 10% per annum over the last decade."

  Explanation: This signifies that, on average, the investment grew by 10% each year over the ten-year period, reflecting its yearly performance.