How to Convert Your Annual Salary to an Hourly Rate
Learn the simple formula to convert annual salary to hourly rate, standard work year assumptions, and why this matters when comparing job offers.
The Simple Formula Everyone Should Know
Converting an annual salary to an hourly rate is a single division: divide your annual salary by the number of hours you work in a year. For a standard full-time employee working 40 hours per week for 52 weeks, the annual hours are 40 times 52, which equals 2,080 hours.
A $52,000 annual salary divided by 2,080 hours equals $25 per hour. A $78,000 salary converts to $37.50 per hour. A $104,000 salary equals $50 per hour. These round numbers make for useful mental benchmarks: $52,000 per year is approximately $25 per hour.
This conversion works in both directions. To convert an hourly rate to annual salary, multiply by 2,080. A $22 per hour job at full time equals $22 times 2,080, which is $45,760 per year. Knowing this lets you quickly evaluate and compare opportunities whether they are presented as hourly wages or annual salaries.
Standard Work Year Assumptions
The 2,080-hour figure assumes 52 weeks per year at 40 hours per week with no time off. In practice, most full-time employees do not work 2,080 paid hours, because paid holidays and vacation time are typically included in their compensation package without affecting the salary calculation.
If you want to calculate your effective hourly rate based on the hours you actually work rather than the hours you are paid for, you need to subtract your paid time off. An employee with two weeks of paid vacation and 10 paid holidays actually works about 1,920 hours per year (2,080 minus 80 vacation hours minus 80 holiday hours). Dividing a $52,000 salary by 1,920 gives an effective rate of $27.08 per hour.
For comparison purposes across different jobs, the standard 2,080-hour divisor is the most common benchmark. Using this standard makes comparisons cleaner since it does not depend on how much vacation or holiday time each employer offers.
Adjusting for Part-Time or Different Hours
If you work fewer than 40 hours per week, adjust the annual hours accordingly. A 32-hour week translates to 32 times 52, which equals 1,664 annual hours. If the annual salary for a 32-hour role is $44,000, the hourly rate is $44,000 divided by 1,664, which equals $26.44 per hour.
Some jobs have non-standard schedules — 37.5 hours per week, 4-day weeks at 10 hours per day, seasonal work for part of the year. Adjust the formula to match the actual expected hours. The principle is the same: divide total compensation by total expected hours to find the hourly equivalent.
For salaried employees who work significant unpaid overtime, the conversion becomes particularly interesting. A $75,000 salary sounds good, but if you regularly work 55 hours per week, your effective hourly rate is $75,000 divided by (55 times 52), which equals $75,000 divided by 2,860, or about $26.22 per hour. Compare that to a $65,000 job with a firm 40-hour week at $31.25 per hour, and the lower-salary role actually pays more per hour worked.
Why This Matters for Job Comparisons
Different jobs structure compensation differently. Hourly jobs typically include overtime pay for hours beyond 40. Salaried exempt positions often do not pay overtime regardless of hours worked. Converting everything to an hourly equivalent lets you make honest apples-to-apples comparisons.
Benefits also belong in the comparison. A job paying $25 per hour with full health insurance, a 401(k) match, and generous paid time off has higher total compensation than a job paying $28 per hour with no benefits. Estimating the dollar value of benefits and adding that to the hourly rate gives a more complete picture.
The conversion is also useful for freelancers and contractors. If a client wants to pay a flat $3,000 for a project you estimate will take 40 hours, your effective hourly rate is $75. Comparing that to your usual freelance rate or an equivalent employment offer helps you decide whether the project is worth taking at the proposed price.