Salary to Hourly Calculator

How many hours are in a work year?

A standard full-time employee works 40 hours per week. Multiplied by 52 weeks, that equals 2,080 hours per year. If you subtract paid time off (e.g., 2 weeks vacation), you get 2,000 working hours, which slightly raises your effective hourly rate.

Pay period reference

• Annual: the total gross salary for the year
• Monthly: annual ÷ 12
• Biweekly: annual ÷ 26 (26 pay periods per year)
• Weekly: annual ÷ weeks worked
• Daily: weekly ÷ 5 (assumes 5-day work week)
• Hourly: annual ÷ (hours/week × weeks/year)

Salary vs hourly: which is better?

Salaried employees often receive benefits (health insurance, PTO) and have predictable income but may not receive overtime pay. Hourly workers are typically entitled to overtime (1.5× rate over 40 hrs/week in the US) and can directly see how extra hours affect earnings.

Use this calculator to compare job offers on an apples-to-apples basis regardless of how compensation is quoted.

Overtime impact

For hourly workers in the US, overtime is paid at 1.5× the regular rate for all hours over 40 per week under the Fair Labor Standards Act. This can significantly boost effective annual income. Example: a worker earning $25/hour averaging 5 hours of overtime per week earns:

• Regular: $25 × 40 hrs × 52 weeks = $52,000
• Overtime: $25 × 1.5 × 5 hrs × 52 weeks = $9,750
• Total: $61,750 - nearly 19% above the base rate

A salaried employee at $52,000 working the same overtime would receive no additional compensation if classified as exempt.

Self-employment adjustment

If you are self-employed or a freelancer, your effective hourly rate is lower than it appears because you bear costs that employers typically cover:

• Self-employment tax: approximately 15.3% of net earnings (covers both employee and employer shares of Social Security and Medicare).
• Health insurance: you pay 100% of premiums (though the premium is tax-deductible above-the-line).
• Retirement contributions: no employer match; you fund 100% of your own retirement savings.
• Unpaid time: vacation, sick days, and time spent on administrative work (invoicing, taxes) reduce billable hours without reducing costs.

A common rule of thumb is that a self-employed rate needs to be at least 1.3–1.5× an equivalent employee salary to break even on total compensation.