Per Year (Annual Salary)
Per Month
Per Week
Per Day
Standard full-time is 40 hours
Standard year is 52 weeks
Please enter valid positive numbers for amount and hours.
Hourly Rate
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Daily Rate
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Weekly Pay
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Monthly Pay
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Annual Salary
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How to Calculate an Employee's Hourly Rate
Determining an employee's hourly rate is essential for both payroll transparency and personal financial planning. Whether you are an employer trying to budget for a new hire or an employee looking to compare a salaried offer against an hourly position, understanding the math behind the conversion is crucial.
The Basic Formula
To calculate an hourly rate from an annual salary, the standard formula is:
Hourly Rate = Annual Salary / (Hours per Week × Weeks per Year)
For a standard full-time employee in the United States, this calculation typically uses 40 hours per week and 52 weeks per year, resulting in 2,080 working hours annually.
Steps to Calculate Manually
Determine the gross pay period amount: Identify if the salary figure is annual, monthly, or weekly.
Normalize to an annual figure:
If Monthly: Multiply by 12.
If Weekly: Multiply by 52.
If Bi-weekly: Multiply by 26.
Calculate total working hours: Multiply the hours worked per week by the weeks worked per year. (Example: 40 hours × 52 weeks = 2,080 hours).
Divide and conquer: Divide the total annual salary by the total working hours to get the raw hourly rate.
Unpaid Time Off Considerations
The standard calculation assumes 52 paid weeks. However, if an employee takes 2 weeks of unpaid leave, the divisor in your formula changes. In this scenario, you would calculate based on 50 weeks (40 hours × 50 weeks = 2,000 hours). This results in a higher effective hourly rate required to meet the same annual income goal.
Loaded Hourly Rate (Employer Cost)
If you are an employer, the "hourly rate" on the paycheck is not your true cost. To calculate the Loaded Hourly Rate (the true cost of the employee), you must add:
Payroll Taxes (Social Security, Medicare)
Worker's Compensation Insurance
Health Benefits and 401(k) contributions
Equipment and Overhead costs
Typically, the loaded rate is 1.25 to 1.4 times the base hourly wage.
Why This Calculation Matters
For Employees: It helps in comparing job offers. A salaried job paying $60,000 requiring 50 hours a week pays less per hour ($23.07) than a $55,000 job requiring strictly 40 hours ($26.44).
For Freelancers: It assists in setting billable rates. Freelancers must charge significantly more than their desired salaried hourly equivalent to cover the lack of benefits and billable downtime.
function calculateHourlyRate() {
// 1. Get input values
var payAmount = parseFloat(document.getElementById('payAmount').value);
var payFrequency = document.getElementById('payFrequency').value;
var hoursPerWeek = parseFloat(document.getElementById('hoursPerWeek').value);
var weeksPerYear = parseFloat(document.getElementById('weeksPerYear').value);
// 2. Elements for display
var resultsArea = document.getElementById('resultsArea');
var errorMsg = document.getElementById('errorMsg');
var resHourly = document.getElementById('resHourly');
var resDaily = document.getElementById('resDaily');
var resWeekly = document.getElementById('resWeekly');
var resMonthly = document.getElementById('resMonthly');
var resAnnual = document.getElementById('resAnnual');
// 3. Validation
if (isNaN(payAmount) || payAmount < 0 || isNaN(hoursPerWeek) || hoursPerWeek <= 0 || isNaN(weeksPerYear) || weeksPerYear <= 0) {
resultsArea.style.display = 'none';
errorMsg.style.display = 'block';
return;
}
errorMsg.style.display = 'none';
// 4. Normalize to Annual Salary first
var annualSalary = 0;
if (payFrequency === 'year') {
annualSalary = payAmount;
} else if (payFrequency === 'month') {
annualSalary = payAmount * 12;
} else if (payFrequency === 'week') {
annualSalary = payAmount * weeksPerYear;
} else if (payFrequency === 'day') {
// Assuming 5 days a week for the 'day' input calculation to annualize
// Or strictly: Daily Rate * DaysPerWeek * WeeksPerYear
// Simplification: Daily * 5 * WeeksPerYear is standard,
// but let's derive days per week from hours per week (Hours / 8).
// To be safe and consistent with user input, we calculate based on hours.
// If user enters Daily, we assume standard Day length or calculate hourly directly.
// Let's assume standard Daily input implies one day's pay.
// If they work 40 hours/week, that's usually 5 days.
// Annual = (Amount * (HoursPerWeek / 8)) * WeeksPerYear? Too complex.
// Simple approach: Annual = Amount * 5 * WeeksPerYear (Standard 5 day week assumption for daily input)
annualSalary = payAmount * 5 * weeksPerYear;
}
// 5. Calculate Total Working Hours
var totalAnnualHours = hoursPerWeek * weeksPerYear;
// 6. Calculate breakdown values
var hourlyRate = annualSalary / totalAnnualHours;
var dailyRate = hourlyRate * (hoursPerWeek / 5); // Assumes 5 day work week for display purposes
var weeklyRate = annualSalary / weeksPerYear;
var monthlyRate = annualSalary / 12;
var finalAnnual = annualSalary;
// 7. Handle Edge Case: Division by zero or infinite
if (!isFinite(hourlyRate)) {
hourlyRate = 0;
}
// 8. Update UI with formatted currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
resHourly.innerText = formatter.format(hourlyRate);
resDaily.innerText = formatter.format(dailyRate);
resWeekly.innerText = formatter.format(weeklyRate);
resMonthly.innerText = formatter.format(monthlyRate);
resAnnual.innerText = formatter.format(finalAnnual);
// 9. Show results
resultsArea.style.display = 'block';
}