Say you earn a salary of $80,000 a year and work a standard 40 hour week. The converter assumes 52 weeks
in a year, so your total scheduled hours are 40 multiplied by 52, which is 2,080 hours. Dividing the
$80,000 salary by 2,080 hours gives an hourly equivalent of about $38.46 an hour. That single number is
the fast way to judge a contract offer or a side gig. If a client offers you $45 an hour, you are ahead
of your salaried rate before counting the lack of paid time off and benefits. If a weekend project pays a
flat $300 for what turns into ten hours of work, that is $30 an hour, well below your $38.46 day-job rate,
so the project is costing you money relative to your time. The same math runs in reverse for overtime:
one extra unpaid hour quietly lowers your true hourly rate below the headline figure.
How it is calculated
The conversion is intentionally simple so the result is easy to trust. The tool multiplies your hours per
week by 52 weeks to get the total hours you work in a year, then divides your annual salary by that
number. With 40 hours a week the divisor is 2,080, which is the standard full-time year used across US
payroll. If you enter fewer hours, the divisor shrinks and your implied hourly rate rises, because the
same salary is spread across less time. This figure is a gross rate, not take-home. It ignores income
tax, payroll tax, and the dollar value of employer benefits like health insurance, a 401(k) match, and
paid leave, which can add 20% to 30% on top of base pay. When you compare a salaried role to contract
work, remember that a contractor usually covers those costs alone, so a fair contract rate sits well
above the bare hourly equivalent shown here.
Frequently asked questions
Use case?
Compare contract offers to salary jobs. Evaluate whether a side gig is worth your time vs your day job's hourly equivalent.
Does a salary-to-hourly conversion account for taxes?
No. This calculator converts gross salary to a gross hourly rate. Your actual take-home pay per hour is lower after federal income tax, FICA (Social Security and Medicare), state income tax, and any pre-tax benefit deductions. To estimate net hourly take-home, apply your effective tax rate to the gross hourly figure. For a rough estimate, subtract 25-35% for federal and state taxes combined on a typical mid-range salary.
Why do some salary offers specify non-standard work hours?
Different roles have different standard hours. Technology and finance companies often base salaries on 40-hour work weeks even if actual hours regularly exceed that. Consulting firms and law firms sometimes specify salaries against an assumed 50-60 hour week. If an employer specifies 45 hours per week in an offer, the true hourly equivalent is (annual salary) / (45 x 52), which is meaningfully lower than the 40-hour calculation. Always clarify expected hours when comparing offers with significantly different base salaries.
How do I compare a salaried offer to an hourly rate offer?
Annualize the hourly offer: hourly rate x hours per week x 52. Then compare total compensation including benefits, not just wages. Salaried roles typically include paid time off, employer health insurance contributions, and retirement plan matching that have real dollar value. A salaried employee at $75,000 with 15 days PTO, full health insurance, and a 4% 401(k) match often receives significantly more total compensation than an hourly worker at the equivalent gross wage rate.