How to Convert Salary to Hourly Pay (With Examples)

When comparing job offers, it is not always apples to apples. One job might offer a $55,000 annual salary, while another offers $26 an hour. Which one is better?

To figure it out, you need to convert the salary into an hourly rate (or vice versa). Here is how the math works.

The Standard Work Year

To do the conversion, employers use a standard full-time work year:

• 40 hours per week
• 52 weeks per year
• Total: 2,080 hours

Formula: Salary to Hourly

Hourly Rate = Annual Salary ÷ 2,080

Example 1: $55,000 Salary

$55,000 ÷ 2,080 = $26.44 per hour.

In this case, the salaried job actually pays slightly more per hour than the $26/hour job.

Example 2: $75,000 Salary

$75,000 ÷ 2,080 = $36.06 per hour.

Formula: Hourly to Salary

Annual Salary = Hourly Rate × 2,080

If you make $20 an hour: 20 × 2,080 = $41,600 per year.

The "Real" Hourly Rate (Accounting for Time Off)

The 2,080 formula assumes you work 40 hours a week, every single week, with no unpaid time off. If you get two weeks of unpaid vacation and 10 unpaid holidays, you are only working about 1,880 hours per year.

To find your "real" hourly rate on a salary:

• $55,000 ÷ 1,880 hours = $29.25 per hour.

What About Overtime?

One major difference between hourly and salary is overtime. Hourly workers are usually entitled to 1.5x their pay for hours over 40 in a week. Most salaried workers are exempt and do not receive overtime, no matter how many hours they work.

How to Calculate Instantly

Instead of memorizing the 2,080 rule, use our Salary to Hourly Calculator. You can input your salary and it will instantly show you your weekly, bi-weekly, and hourly pay. Once you know your gross hourly rate, you can estimate your take-home pay with our Paycheck Calculator.