Salary to Hourly Rate Calculator
Convert your annual compensation into an equivalent hourly wage instantly.
How to Calculate Hourly Rate from Salary
Converting a salary to an hourly rate is essential for comparing job offers, calculating overtime value, or determining your worth for freelance side-projects. While most employees think in terms of their "annual number," businesses often track costs by the hour.
The Basic Formula
The simplest way to calculate your hourly rate is to divide your total annual pay by the total number of hours worked in a year. For a standard 40-hour work week, 52 weeks a year, the formula is:
Hourly Rate = Annual Salary / (Hours per Week × Weeks per Year)
The "2,080 Rule"
In the world of HR and accounting, 2,080 is the magic number. This represents 40 hours per week multiplied by 52 weeks. If you earn $50,000 per year, dividing by 2,080 gives you an hourly rate of approximately $24.04.
Realistic Calculation Example
Let's look at a real-world scenario. Suppose Sarah accepts a job offer for $75,000 per year. She is expected to work 45 hours per week and takes 2 weeks of unpaid leave (meaning she works 50 weeks).
- Total Annual Hours: 45 hours × 50 weeks = 2,250 hours.
- Hourly Calculation: $75,000 / 2,250 hours = $33.33 per hour.
If Sarah had assumed a standard 40-hour week, she would have estimated her value at $36.05. By calculating based on her actual expected hours, she gets a more accurate picture of her time's value.
Why This Calculation Matters
Understanding your hourly rate helps you in several areas:
- Overtime Comparison: If you are offered a "promotion" to a salaried role from an hourly role, calculate the hourly rate first. If the salary requires 50-60 hours a week, you might actually be taking a pay cut per hour.
- Opportunity Cost: Knowing you make $40/hour makes it easier to decide if paying someone $25/hour to mow your lawn or clean your house is a good financial trade-off.
- Side Hustles: When quoting for freelance work, use your salaried hourly rate as a baseline, then add 30-50% to cover your own taxes and benefits.