Salary to Hourly: How to Convert, and How Overtime Works
Knowing your hourly rate makes it much easier to compare job offers, evaluate overtime or price freelance work. The conversion takes one division.
The basic formula
Hourly rate = annual salary / hours worked per year
A full-time year is normally counted as 2,080 hours: 40 hours a week for 52 weeks. Paid vacation and holidays are included in that figure.
| Annual salary | Hourly (2,080 hours) |
|---|---|
| $40,000 | $19.23 |
| $60,000 | $28.85 |
| $80,000 | $38.46 |
| $100,000 | $48.08 |
A quick shortcut: divide the salary by 2,000 for a rough answer. $60,000 is about $30 an hour.
Going the other way
Annual salary = hourly rate × hours per week × 52
$25 an hour at 40 hours a week is $52,000 a year. The shortcut here is to double the hourly rate and add three zeros: $25 becomes $50,000, close to the exact figure.
Paychecks and pay periods
| Pay schedule | Paychecks per year | $60,000 salary |
|---|---|---|
| Weekly | 52 | $1,153.85 |
| Biweekly | 26 | $2,307.69 |
| Semi-monthly | 24 | $2,500.00 |
| Monthly | 12 | $5,000.00 |
Biweekly and semi-monthly are easy to confuse. With biweekly pay, two months of the year have three paydays.
Gross is not take-home
All of these figures are gross pay. Your paycheck is smaller after:
- Federal income tax withholding
- Social Security and Medicare (FICA)
- State and local income tax, where applicable
- Health insurance premiums, 401(k) contributions and other deductions
Comparing job offers
Hourly rate reveals differences that the salary hides. A $70,000 job that routinely requires 50 hours a week pays about $26.92 an hour. A $62,000 job at a true 40 hours pays $29.81.
Benefits matter too. Employer-paid health insurance, a 401(k) match and paid time off can be worth thousands of dollars a year.
How overtime works
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must be paid at least 1.5 times their regular rate for hours worked beyond 40 in a workweek.
Example: 46 hours at $20 an hour.
- Regular pay: 40 × $20 = $800
- Overtime pay: 6 × $30 = $180
- Total: $980
Things to know:
- Overtime is calculated per workweek. Hours cannot be averaged across two weeks.
- Federal law does not require overtime for weekends or holidays as such, only for hours over 40.
- Some states go further. California, for example, also requires daily overtime.
Who is exempt?
Being paid a salary does not automatically make you exempt. In general, an employee is exempt only if they are paid on a salary basis, earn at least the minimum salary threshold set by the Department of Labor, and perform executive, administrative or professional duties as defined in the regulations. Salaried employees who do not meet those tests are entitled to overtime.
If you are unsure of your status, your state labor office or the Department of Labor’s Wage and Hour Division can help.
Results are estimates for informational purposes only and are not financial, tax, legal or medical advice.