Why use this calculator
Job offers arrive in different units. One role quotes an hourly rate, the next quotes a salary, a contract quotes a day rate and a recruiter quotes a monthly figure, and none of them can be compared until they are in the same shape. This converter puts all of them side by side in a single pass.
It also handles the two details that most quick conversions ignore and that change the answer materially: overtime, which under the Fair Labor Standards Act must be paid at time and a half above forty hours a week for non-exempt employees, and unpaid weeks, which reduce an hourly worker's real annual income while a salaried worker is paid regardless.
If you are weighing hourly work against a salaried role, those two adjustments are usually where the apparent difference between the offers actually lives. The figures here are gross, before any tax or benefit deduction.
How to use it
- Enter the pay amount you have been quoted and then tell the converter what it is, either an hourly rate or an annual salary, using the input type selector.
- Set base hours per week to your scheduled hours before any overtime, which you will find in your contract or on your roster rather than on your pay stub.
- Enter your average weekly overtime hours if you regularly work past forty, and the converter will pay them at time and a half.
- Set paid weeks per year to 52 if your leave is paid, or subtract any weeks you expect to take unpaid, which matters far more for hourly work than for salary.
- Finally set the number of days you work in a week, which is used only to turn the weekly figure into a day rate for shift comparisons.
What each result means
- Annual salary
- Total gross pay for a full year at these hours, before tax, insurance or retirement deductions of any kind.
- Hourly rate
- Gross pay for one base hour. When you enter a salary this is the figure the converter solves for.
- Each extra $1 an hour adds
- How much a raise of one dollar an hour adds to your yearly pay at your current hours, with overtime hours counted at time and a half. Multiply it by any raise you are offered to see its yearly value.
- Each extra overtime hour a week adds
- The yearly pay from working one more overtime hour every week at time and a half. It shows what a regular extra shift is worth before tax, so you can weigh it against your time.
- Overtime rate (1.5x)
- What each qualifying overtime hour pays under federal law for non-exempt employees, at one and a half times base.
- Monthly
- Annual pay divided by twelve. Useful for budgeting even if your employer does not actually pay monthly.
- Semi-monthly (24 pays)
- Pay for one of twenty-four periods, typically the fifteenth and the last day of each month.
- Bi-weekly (26 pays)
- Pay for one of twenty-six fortnightly periods, which means two months each year contain three paychecks.
- Weekly
- Annual pay divided by fifty-two, which is the cleanest figure for comparing shift work across employers.
- Daily
- The weekly figure split across the days you actually work, which is the number to compare against a contract day rate.
- Base pay before overtime
- Annual earnings from scheduled hours only, showing how much of your income depends on overtime continuing.
- Overtime pay per year
- Annual earnings from overtime hours alone, at the time and a half premium rate.
- Paid hours per year
- Total actual hours worked and paid, base plus overtime, before the overtime premium is applied.
The formula
Annual salary = Hourly rate multiplied by (base hours per week multiplied by paid weeks per year, plus overtime hours per week multiplied by paid weeks per year multiplied by 1.5)
The 1.5 factor is the Fair Labor Standards Act overtime premium for non-exempt employees working beyond forty hours in a workweek.
Running the conversion the other way, Hourly rate = Annual salary divided by that same equivalent hour count
Monthly is annual divided by twelve, semi-monthly divided by twenty-four, bi-weekly divided by twenty-six and weekly divided by fifty-two, and the daily figure is the weekly figure divided by the days you work.
How this number is used in practice
The classic use is comparing an hourly offer against a salary. A $30 an hour role looks close to a $62,400 salary at forty hours across fifty-two weeks, but the comparison usually breaks in one of two places. If the hourly role has no paid leave, two weeks off costs $2,400 and the real figure is closer to $60,000.
If the salaried role is exempt and expects fifty-hour weeks, the effective hourly rate quietly drops to $24. Run both sides through this converter using honest hours and honest paid weeks, and the offers usually separate clearly.
Freelancers and contractors need the conversion in reverse and with a much larger adjustment. A contractor paying self-employment tax, buying their own health insurance and funding their own retirement typically needs a rate somewhere between one and a half and twice the equivalent employee hourly figure to end up in the same place, and that is before allowing for unbillable time.
If you want a $90,000 employee-equivalent income, start from the hourly figure this page produces, then divide by the share of your week you can realistically bill, which for most independent workers is between sixty and seventy-five percent.
The bi-weekly result is worth reading carefully if that is how you are paid. Twenty-six paychecks across twelve months means two months of every year contain three, which feels like a windfall but is not extra money. A budget built on two paychecks a month is safe, and the two extra ones become a debt payment or a savings transfer instead of quietly disappearing.
Worked examples
$25 an hour, 40 hours a week, 52 paid weeks, no overtime
An annual salary of $52,000, which is $4,333.33 a month and $2,000.00 bi-weekly.
A $75,000 salary converted back to an hourly rate at 40 hours and 52 weeks
An equivalent hourly rate of $36.06, or $288.46 a day across a five-day week.
$22 an hour with 8 overtime hours a week and only 48 paid weeks
An annual total of $54,912.00, of which $12,672 comes from overtime at the time and a half rate of $33.00.
When people use it
- Comparing an hourly job offer against a salaried one on the same basis
- Setting a freelance or contract rate that matches a target employee salary
- Working out what dropping to four days a week does to annual income
- Valuing a regular overtime pattern before deciding whether to keep it
- Converting a quoted monthly or day rate into an annual figure for a loan or rental application
Tips
- A quick mental conversion: double the hourly rate and add three zeros. $25 an hour is roughly $50,000 a year at full time.
- Benefits are worth roughly 20% to 30% on top of a salary. An hourly role with no health cover or retirement match needs a higher rate to match.
- Use paid weeks, not calendar weeks. Unpaid leave costs an hourly worker directly and costs a salaried worker nothing.
- Contractors should target one and a half to two times the employee hourly equivalent to cover self-employment tax, insurance and unbillable time.
- Exempt salaried roles have no overtime, so a fifty-hour culture cuts the real hourly rate by twenty percent without any change to the contract.
- If you are paid bi-weekly, budget on twenty-four paychecks and treat the two extra ones as a debt payment or a savings transfer.
What it assumes, and where it stops being accurate
- All figures are gross. Federal tax, state tax, Social Security, Medicare, insurance premiums and retirement deferrals are not deducted.
- Overtime is paid at exactly time and a half above your base hours. Double time, shift differentials, weekend loadings and on-call pay are not modelled.
- The value of employer benefits, paid leave, health insurance and a retirement match is excluded, which understates a salaried package.
- Hours are assumed to be the same every week. Seasonal, casual and shift patterns with heavy variation will not match this straight-line model.
- Bonuses, commission, tips and equity are excluded, so commission-heavy roles will read low here.
- It assumes you are non-exempt for overtime purposes. Exempt salaried employees are not entitled to the federal overtime premium at all.
Terms used on this page
- Exempt employee
- A salaried worker excluded from federal overtime rules by duties and salary level, and therefore paid nothing extra for long weeks.
- Non-exempt employee
- A worker entitled to at least time and a half for hours beyond forty in a workweek under the Fair Labor Standards Act.
- Regular rate
- The base hourly figure that overtime is calculated from, including certain bonuses and shift premiums.
- Bi-weekly pay
- Payment every two weeks, producing twenty-six paychecks a year, with two months containing three paydays.
Questions people ask
- Why use 52 weeks instead of 50?
- A calendar year contains about 52.14 weeks, so 52 gives the standard annual figure and is what payroll systems assume for a salaried employee with paid leave. Drop the number only if you are genuinely unpaid for some weeks, which is common for hourly, seasonal and school-term roles. Subtracting two unpaid weeks lowers a $52,000 equivalent to $50,000.
- How does overtime change the conversion?
- Under the Fair Labor Standards Act, non-exempt employees must be paid at least one and a half times their regular rate for hours worked beyond forty in a workweek. This converter values each overtime hour at 1.5 normal hours, so eight overtime hours a week adds twelve hours of pay. Exempt salaried employees receive no overtime premium, which is why long hours reduce their effective rate.
- What hourly rate do I need as a freelancer to match a salary?
- Usually between one and a half and two times the employee equivalent. You pay both halves of Social Security and Medicare through self-employment tax, buy your own health insurance, fund your own retirement, take unpaid leave and cannot bill every hour you work. Start with the hourly figure shown here, then divide by your realistic billable share, which is commonly sixty to seventy-five percent.
- Is bi-weekly the same as semi-monthly?
- No, and confusing them is a common budgeting error. Bi-weekly means every two weeks, giving twenty-six paychecks a year, so two months contain three paydays. Semi-monthly means twice a month, giving twenty-four slightly larger paychecks on fixed dates. The annual total is identical but the individual paycheck and the monthly cash flow differ noticeably.
- Does this show take-home pay?
- No. Every figure here is gross pay before federal and state income tax, Social Security, Medicare, health premiums and retirement deferrals. Expect to keep somewhere between sixty-five and eighty percent of these amounts depending on your state and deductions. Use the paycheck calculator with the same annual figure to see the net result for your situation.
- How should I compare a day rate to a salary?
- Compare it against the daily result on this page, but adjust the contractor side first. A day rate buys no paid leave, no public holidays, no sick pay, no employer retirement contribution and no notice period, so a contractor typically bills around two hundred and twenty days a year rather than two hundred and sixty. Multiply the day rate by realistic billable days, not calendar working days.
Use this with
Hourly to Salary Converter answers one part of the question. These pick up where it stops: Paycheck Calculator, Freelance Rate Calculator, Freelance Hourly Rate Calculator and Salary Calculator.
Where these figures come from
Figures and rules on this page follow United States federal rules.
- U.S. Department of Labor: Fair Labor Standards Act. Overtime and minimum wage rules for non-exempt employees
- U.S. Bureau of Labor Statistics. Wage, earnings and price statistics
- Consumer Financial Protection Bureau. Independent federal guidance on borrowing, saving and housing
Hourly to Salary Converter produces an estimate for general information. It is not financial, tax, medical, legal or engineering advice. read the full disclaimer. Spotted a wrong number? Report it and it gets fixed. The form picks up this calculator and the inputs you used.