Whether you are comparing a salaried job offer to your current hourly position, negotiating pay, or just trying to understand your earnings in annual terms, knowing how to convert between hourly and annual pay is a useful skill. The math is straightforward once you know which assumptions to use.
The Standard Conversion Formula
The most common formula assumes a full-time work schedule:
Annual salary = Hourly wage × Hours per week × Weeks per year
The standard inputs are 40 hours per week and 52 weeks per year, which gives:
Annual salary = Hourly rate × 40 × 52 = Hourly rate × 2,080
This is the baseline most employers and job postings use for full-time employees.
Quick Reference Table
- $15/hour → $31,200/year
- $20/hour → $41,600/year
- $25/hour → $52,000/year
- $30/hour → $62,400/year
- $40/hour → $83,200/year
- $50/hour → $104,000/year
For custom conversions, use our Hourly to Salary Calculator.
Adjusting for Actual Hours Worked
The 2,080-hour figure is a theoretical maximum for a full-time worker with no time off. In practice, your actual paid hours may differ:
- With 2 weeks of paid vacation: 50 weeks × 40 hours = 2,000 hours
- With 10 paid holidays: (52 weeks × 40 hours) − (10 days × 8 hours) = 2,000 hours
- Part-time (30 hours/week): 30 × 52 = 1,560 hours
If you are salaried, you typically receive the same pay regardless of holidays or vacation — your employer pays for those days. For hourly workers who are not paid for time off, actual annual earnings are lower.
Going the Other Direction: Salary to Hourly
To convert a salary to an hourly equivalent:
Hourly rate = Annual salary ÷ 2,080
A $75,000 salary works out to $75,000 ÷ 2,080 = $36.06/hour.
This is useful when comparing a job offer to contract work or evaluating whether a consulting rate is competitive with a full-time equivalent.
Accounting for Unpaid Time
For contractors or freelancers, unpaid time matters more because downtime between clients is not billable. If you work 45 paid weeks per year (taking 7 weeks off for holidays, vacation, and gaps), your effective annual earnings at $40/hour are:
- $40 × 40 × 45 = $72,000 (vs $83,200 at 52 weeks)
This is why freelancers and contractors often need a higher hourly rate than salaried employees to achieve equivalent total annual income.
Benefits Are Part of the Equation
When comparing hourly vs salaried positions, factor in the value of benefits. Employer-sponsored health insurance, 401(k) matching, paid time off, and other perks have real dollar value. A $50,000 salary with comprehensive benefits might be worth more than a $60/hour contract without them.
Minimum Wage in Annual Terms
The US federal minimum wage of $7.25/hour equals $15,080/year at 2,080 hours. Many states have set higher minimums. At $15/hour — the minimum in California, New York, and other states — full-time annual earnings reach $31,200. At $17/hour, they reach $35,360. These figures are gross; take-home pay after federal and state taxes is lower.
Frequently Asked Questions
How many weeks of paid time off should I subtract when calculating actual annual earnings?
The answer depends on your employment type. For salaried employees with paid vacation, subtract nothing — you are paid for PTO. For hourly employees who are not paid for time off, subtract your actual unpaid weeks. If you take two weeks of unpaid vacation and have 8 unpaid holidays (16 days × 8 hours = 128 hours), your effective working hours drop from 2,080 to 1,952, reducing a $25/hour rate from $52,000 to $48,800 in actual earnings.
Is $2,080 always the right number to use?
For full-time salaried positions, $2,080 (40 hours × 52 weeks) is the standard. For anyone who works different hours — part-time, seasonal, or variable schedules — use your actual average hours per week multiplied by the weeks you work. A nurse working three 12-hour shifts per week works 36 hours × 52 weeks = 1,872 hours annually, so their annual income at $40/hour is $74,880, not $83,200.
How does this calculation change for overtime workers?
For employees who regularly work overtime, your annualized income should be calculated in two parts: regular hours at your base rate, plus overtime hours at 1.5× your base rate (under federal law, for non-exempt employees working over 40 hours per week). Someone earning $20/hour who regularly works 45 hours per week earns: (40 hours × $20) + (5 hours × $30) = $950/week = $49,400/year — not $46,800 as the straight 45 × 52 × $20 calculation would suggest.
Estimate your total compensation with the Hourly to Salary Calculator and then run the after-tax comparison with the Salary After Tax Calculator.