Hourly to Salary Calculator

Salary vs. Hourly Pay: What’s the Real Difference?

Understanding the difference between hourly and salary pay is crucial whether you’re negotiating a new job offer, evaluating benefits, or planning your financial future.

• Salary Pay: A fixed annual amount paid regardless of the number of hours worked weekly. Salaried employees are often in full-time exempt roles, meaning they do not qualify for overtime.
• Hourly Pay: Compensation based on the exact number of hours worked. Hourly employees are usually non-exempt under the Fair Labor Standards Act (FLSA) and are entitled to overtime pay—typically 1.5 times the hourly rate for hours worked beyond 40 in a week.

Quick Comparison Table: Salary vs. Hourly

How to Convert Hourly Pay to Salary

To convert your hourly wage into an annual salary, use the following formula:

💡 Formula:

Hourly Rate × Hours Worked Per Week × 52 Weeks = Annual Salary

🔢 Examples:

• $16/hour → $33,280/year
• $25/hour → $52,000/year
• $40/hour → $83,200/year

These examples assume a standard 40-hour workweek and no unpaid time off.

How to Convert Salary to Hourly

If you’re earning a fixed annual salary and want to understand your equivalent hourly wage, use this formula:

💡 Formula:

Annual Salary ÷ Total Hours Worked per Year = Hourly Rate

Step-by-Step:

1. Multiply your daily work hours by number of workdays per year to get total hours worked.
2. Divide your annual salary by that number.

Example:

• Work schedule: 8 hours/day × 240 days/year = 1,920 hours
• Salary: $57,600 ÷ 1,920 = $30/hour

Shortcut Method (for 40-hour workweeks):

Use 2,080 hours/year (40 hours × 52 weeks):

• $57,600 ÷ 2,080 = $27.69/hour

Salary to Hourly Examples (Standard 40-Hour Workweek)

Is Salary Better than Hourly?

Both salary and hourly pay structures offer pros and cons. Your ideal option depends on your career stage, lifestyle, and financial goals.

✔️ Choose Salary If:

• You value predictable income
• You want access to full-time benefits (healthcare, retirement plans, PTO)
• You prefer long-term roles or leadership positions

✔️ Choose Hourly If:

• You value schedule flexibility
• You want compensation for every hour worked, including overtime
• You’re freelancing or working part-time/seasonal roles

Don’t Forget: Gross vs. Net Pay

All calculations provided here reflect gross income before deductions like taxes, insurance, or retirement contributions. Always check your net or take-home pay when budgeting.

Final Thoughts

Whether you’re switching from hourly to salary or vice versa, understanding your true earning power can empower better job negotiations, smarter budgeting, and long-term financial planning.