Transparent method
The formula
Worked example
Example inputs
How to interpret the result
An hourly rate depends on how many hours the salary is actually spread over. A $65,000 salary across 40 hours and 52 weeks is about $31.25 an hour, or about $5,417 a month. If you work 50 weeks and the other two are unpaid, the same salary is $32.50 an hour. The comparison with an hourly job should account for paid time off, overtime rules, benefits and the true hours you work, which are often longer than the contract says.
Before you rely on it
What to check
Count the hours you really work, including unpaid overtime and commuting to a job that is hourly-billed. Then compare the effective rate with an hourly offer.
The common error
Where people go wrong with salary to hourly calculator
Comparing a salary with an hourly rate on the wage alone. Benefits, paid leave and job security are part of the pay, and they differ between the two.
Sensitivity evidence
How annual salary changes the equivalent hourly rate
| Annual salary | Equivalent hourly rate | Equivalent monthly pay |
|---|---|---|
| $52,000 | $25 | $4,333 |
| $58,500 | $28 | $4,875 |
| $65,000worked example | $31 | $5,417 |
| $71,500 | $34 | $5,958 |
| $78,000 | $38 | $6,500 |
Every input, tested
Which input moves the equivalent hourly rate most
| Input | Tested from | To | Equivalent hourly rate at each end | Swing |
|---|---|---|---|---|
| Annual salary | $58,500 | $71,500 | $28 to $34 | $6.25 (20%) |
| Hours per week | 36.0 hours | 44.0 hours | $35 to $28 | $6.31 (20%) |
| Working weeks per year | 47 | 57 | $35 to $29 | $6.07 (19%) |
Two variables at once
Equivalent hourly rate by annual salary and hours per week
| Annual salary \ Hours per week | 32.0 hours | 40.0 hours | 48.0 hours |
|---|---|---|---|
| $52,000 | $31 | $25 | $21 |
| $58,500 | $35 | $28 | $23 |
| $65,000 | $39 | $31 | $26 |
| $71,500 | $43 | $34 | $29 |
| $78,000 | $47 | $38 | $31 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Annual salary | $65,000 |
| Hours per week | 40.0 hours |
| Working weeks per year | 52 |
| Equivalent hourly rate | $31 |
| Equivalent monthly pay | $5,417 |
Where the inputs come from
Annual salary is the base pay before deductions. Hours per week is what you actually work, not the contract minimum, and working weeks per year is 52 for a full year and fewer if you take unpaid time off. Paid vacation and holidays are usually included in the 52 weeks, since you are paid for them. To see an effective rate, use the hours you really work including unpaid overtime.
Using the equivalent hourly rate in a real decision
A freelancer should charge more than the equivalent rate to cover benefits and unpaid time.
When the result stops applying
The result is gross pay, before tax and deductions. Salaried exempt employees are not entitled to overtime, so extra hours are unpaid, and the effective hourly rate falls. Benefits such as health insurance and retirement matches add to the value of a salaried job. Unpaid holidays and time off reduce the working weeks.
What to compare it with
Estimate take-home pay on the take-home pay and paycheck calculators, and see the overtime pay and gross pay pages for hourly work. The pay raise calculator shows the effect of a raise. The self-employment tax calculator helps freelancers set rates.
People also ask
Frequently asked questions
How do I convert a salary to an hourly rate?
Divide the annual salary by the hours worked in a year, which for 40 hours a week and 52 weeks is 2,080 hours.
Should I use my actual hours?
Yes. If you regularly work more than 40 hours for a fixed salary, your effective hourly rate is lower than the contract figure suggests.
What should a freelancer charge compared with a salary?
More than the equivalent hourly rate, often 1.5 to 2 times, to cover self-employment tax, benefits, unpaid time and business costs.