How to Convert an Hourly Rate to an Annual Salary (and Back)
Comparing an hourly job to a salaried one, or a contract rate to a permanent offer, means putting both on the same footing. The conversion is simple arithmetic, but unpaid time off and the difference between gross and take-home pay catch people out.
The basic conversion
The quick version assumes a full 52 weeks: 25 per hour x 40 hours x 52 weeks = 52,000 a year. This is the gross figure before tax, and it assumes every week is paid.
Adjusting for unpaid time off
If your time off is unpaid (common for contractors and many hourly roles), subtract those weeks. Two unpaid weeks means you work 50, not 52: 25 x 40 x 50 = 50,000. Salaried employees are usually paid for holiday, so when comparing a contract rate to a salary, model the contractor with unpaid weeks to compare fairly.
Salary back to hourly
A 60,000 salary over 40 hours and 52 weeks is 60,000 / 2,080 = about 28.85 per hour. The 2,080 figure (40 x 52) is the standard full-time year, which is why salaries are often quoted as roughly the hourly rate times 2,000.
Why a contract rate should be higher
A contractor charging the same hourly rate as a salaried equivalent earns less overall, because they get no paid holiday, no employer pension contribution, no sick pay, and often no benefits. As a rough guide, a contract rate usually needs to be meaningfully higher than the salaried hourly equivalent just to break even on total compensation.
Gross is not take-home
Every figure here is gross (before tax). Your take-home depends on your tax bracket, deductions, and location, so two people on the same salary can net different amounts. Use gross for comparing offers, but budget from your actual take-home.
Use the Hourly to Salary Calculator
The Hourly to Salary Calculator converts in both directions and shows the result across every period - per hour, day, week, month, and year - so you can line up an hourly offer against a salary instantly, including unpaid weeks off.
Frequently asked questions
How many work hours are in a year?
A standard full-time year is 2,080 hours (40 hours x 52 weeks) before any time off. Subtract holiday and other leave to get actual hours worked. Part-time and shift roles vary, so always use your real hours per week.
Does this include overtime?
No. This is the base conversion. If you regularly work overtime at a higher rate, calculate that separately and add it - the Overtime Calculator handles the time-and-a-half maths for hours above your threshold.
Use the tools
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