How to Convert Hourly to Salary
The formula is straightforward — and it works in both directions:
Annual Salary = Hourly Rate × Hours per Week × Weeks per Year
For a standard full-time schedule (40 hours × 52 weeks), this simplifies to the well-known rule of thumb: hourly rate × 2,080 = annual salary.
- $25/hr × 40 × 52 = $52,000/year
- $20/hr × 2,080 = $41,600/year
- $60,000 ÷ 2,080 = $28.85/hr
Going the other way: divide the annual salary by your total working hours per year. The calculator handles both directions and adjusts for part-time schedules automatically.
Effective Hourly Rate: What Your Time Is Really Worth
Your nominal hourly rate divides your salary by all scheduled hours — including the ones you don't work. Your effective hourly rate divides the same salary by the hours you actually show up for, which is higher when you have paid time off.
Example: a $62,000 salary at 40 hours/week, 52 weeks/year.
- Nominal rate: $62,000 ÷ 2,080 = $29.81/hr
- With 15 PTO days (120 hours): $62,000 ÷ 1,960 = $31.63/hr
- With 4 weeks PTO: $32.29/hr — roughly 8% higher
This matters when comparing job offers: a slightly lower salary with generous PTO can deliver a better effective hourly rate than a higher salary with no time off.
Hourly vs Salary: Which Is Better for You?
Neither is inherently better — it depends on your work pattern and priorities:
- Hourly (non-exempt): paid for every hour worked, including overtime at 1.5× after 40 hours/week under the FLSA. Income varies with hours available.
- Salary (exempt): predictable paycheck and typically includes benefits — health insurance, 401(k) match, PTO — worth an estimated 20–40% on top of base salary. But extra hours are usually unpaid.
One hidden trap: a $46,000 salary with 50-hour weeks equals an effective rate of only $17.69/hr — barely more than the hourly job that would pay overtime on those extra hours. Always compare effective rates, not headline numbers.
Comparing a Salary Offer vs an Hourly Job
When two offers quote different pay structures, convert both to the same unit first. Then factor in benefits — employer-sponsored health insurance alone averaged $8,951/year for single coverage and $25,572/year for family coverage in premiums in 2024 (KFF 2024 Employer Health Benefits Survey).
Worked example: Offer A is a $58,000 salary with full benefits; Offer B is $32/hr contract with none.
- Offer A: $58,000 ÷ 2,080 = $27.88/hr, plus ~$12,000 in benefits ≈ $33.65/hr effective
- Offer B: $32/hr × 40 × 52 = $66,560/year, but no benefits and self-employment tax (~7.65% extra) on top
The contract pays more gross, but after benefits value and self-employment tax the two can be close — the salaried role may even win. Compare total compensation, not just the hourly number.
Freelance Rate From Your Target Salary
Freelancers consistently underestimate their required hourly rate because they forget unbillable time — admin, marketing, vacation, sick days — and overhead. A realistic planning assumption is 1,500 billable hours per year (about 75% of a 2,080-hour year) — the rest goes to running the business, not earning.
Target $80,000/year income: $80,000 ÷ 1,500 = $53.33/hr, then add 25–30% for taxes and overhead → $65–70/hr client rate.
For a full freelance pricing breakdown — day rates, retainer, overhead — see our Freelance Rate Calculator.
Frequently Asked Questions
How do I convert hourly wage to annual salary?
Multiply hourly rate × hours per week × weeks per year. $25/hr × 40 × 52 = $52,000/year. The shortcut for full-time: rate × 2,080.
What is $20 an hour annually?
$41,600/year gross at 40 hours/week. Take-home is roughly $35,000–$37,000 after federal taxes and FICA, depending on filing status and state.
How does PTO affect my hourly rate?
PTO raises your effective rate — same salary, fewer hours actually worked. Each week of PTO adds roughly 2% to your effective hourly rate.
How many working hours are in a year?
2,080 hours (40 × 52) is the standard. With 11 US federal holidays: ~1,992 hours. With 10 PTO days: ~1,912 productive hours.
Are these figures before or after taxes?
Before taxes — this converter works with gross pay. For net take-home pay, use the Take-Home Pay Calculator.
What's the difference between bi-weekly and semi-monthly pay?
Bi-weekly = 26 paychecks/year (every 14 days); semi-monthly = 24 paychecks/year (fixed dates, twice a month). Annual totals are identical — only timing differs.
Methodology: Conversions use the standard formula (rate × hours/week × weeks/year) with 2,080 annual hours as the full-time baseline. Effective hourly rate divides salary by hours actually worked after subtracting PTO days. Figures are gross estimates — state and federal taxes, and employer-specific benefits, vary. This tool does not constitute financial or legal advice.