Hourly to Salary Calculator

Calculate your equivalent annual salary for an hourly wage using the calculator below.

How to Convert Hourly Pay to Annual Salary

There are many different variables you’ll need to consider when exploring job options. In addition to thinking about how much you’ll get paid, it will also be important to consider how and when your pay will be calculated.

Generally speaking, most employee compensation plans will fall into one of two different categories: hourly pay or annual salary. With an hourly pay plan, your compensation will be directly determined by the number of hours that you work.

Typically, these payment plans will come with a set hourly rate and sometimes offer the potential for additional pay, such as overtime hours and tips. Hourly pay plans are often tracked using time sheets.

With an annual salary, your compensation package will be determined in dollars per year. In many cases, it will be expected that you work at least 40 hours per week, and you will be allowed a certain number of paid vacation days per year.

In general, hourly pay arrangements are more common for manual labor, and annual salary arrangements are more common for office work. Of course, there are exceptions to these general rules. Nevertheless, you might be wondering how to compare hourly wages to an annual salary.

Let’s take a closer look.

Steps to Convert Hourly Wage to a Salary

Converting an hourly wage to an annual salary is actually pretty easy. First, you will need to determine your hourly wage. If the wage is variable (bonuses, tips, overtime pay, holiday pay, etc.), you’ll have to make some adjustments to your final calculation.

But if your wage is universal (the same no matter what), the next thing you will need to determine is the average number of hours you work in a week.

A lot of people work 40 hours per week, but if you take two weeks off each year, then the average amount of hours you work per week will be slightly less than 40.

Whether you get paid for your time off or not also factors into this equation.

Noting there are (approximately) 52 weeks in a year, you can then use the formula below.

Hourly to Salary Formula

annual salary = hourly wage × hours per week × 52

This figure indicates how much money an hourly employee makes annually. (This formula assumes the hourly wage is not affected by overtime, tips, etc.) Here is an example of how to convert hourly wages into an annual salary.

For example, let’s suppose that your current hourly salary is $30 per hour and, accounting for the days you take off throughout the year, you typically work 35 hours per week.

Considering there are 52 weeks (and one day, which we’ll round off) in a year, you can then plug these figures in below:

annual salary = $30 × 35 × 52
annual salary = $54,600

Now you know what your annual salary would be if you worked 35 hours per week at $30 per hour. However, it is important to remember that this is a very simplified formula.

Many things can cause your annual salary to change, such as tips, bonuses, holiday and overtime pay, and more. There also might be “non-cash” components of your salary, such as employer-paid health insurance, retirement benefits, and more.

These non-cash components still have a very real financial value (after all, if you aren’t getting health insurance from your employer, you’d have to pay for it on your own).

So each component should be accounted for when comparing different compensation packages.

Regardless, at the very least, knowing how to convert hourly wages into an annual salary (and vice versa) can be very beneficial in negotiating your pay with a current or potential employer.

How to Find Your Monthly Salary

Typically, the term “salary” refers to your annual income, but you can also use it to describe your monthly income as well. To calculate your monthly salary, follow the steps above, then divide your annual salary by 12, since there are 12 months in a year.

How to Account for Taxes and Withholdings

These salary calculations are your annual pay before income taxes and deductions are withheld.

To find your post-tax take-home pay, you’ll need to subtract income tax, social security, medicare, and state and local taxes, along with your other withholdings, such as insurance or retirement, from your pre-tax salary.

To determine your taxes and withholdings, it’s best to consult with an accountant or use the IRS tool for calculating withholdings.[1]

Pros and Cons of Hourly Pay

One of the clearest benefits of hourly pay is that if you work more, you will get paid more. These simple pay structures will directly compensate you for the amount of time that you work.

At the same time, the average hourly rate is lower than the average salary (though this is only partially because of the wage structure). Hourly pay can also create gaps in your pay, which can be frustrating if you take time off for vacation that is unpaid.

Pros and Cons of Annual Salary

With an annual salary, you’ll have a more consistent payment structure that makes long-term financial planning considerably easier. Additionally, salary pay is usually easier to use when negotiating and comparing different offers.

Salary employees are also more likely to have greater non-cash compensation benefits, and these jobs may be more secure.

On the other hand, many salary employees end up working more than 40 hours per week. If you are salaried, you’ll likely find yourself at least occasionally working late (or on the weekends) without any additional compensation.

Which One is Right for You?

When comparing jobs, look at your total compensation package. How much money will you earn in the next year and what other benefits are being offered?

If you can assign a cash value to these benefits, the comparison will be even easier. In some cases, this means the hourly job will be best; in others, an annual salary might be better.

You might also be interested in our salary to hourly pay calculator.

Frequently Asked Questions

What is an appropriate salary to ask for?

Each industry and employer differs in the salary they offer. You can check average salaries for various jobs on job sites such as Salary.com, ZipRecruiter.com, or Indeed.com.

How much can you negotiate salary?

When receiving a job offer, you can try to negotiate the salary offered by the potential employer. Employers cannot always negotiate a salary, for example, if they have a strict budget, but some employers do have flexibility in the salary for the position that you are being offered.

What is the difference between a salary and a commission?

A salary is a set amount that an employee is paid for their work, typically paid weekly or bi-weekly. However, commissions describe any earnings that are paid as a result of making a sale.

Salary earnings are not typically directly correlated with making a sale.

Are salaries based on 40 hours?

With an annual salary, your earnings are typically determined in dollars per year with the assumption that you will work about 40 hours every week. Typically, salary employees may be required to work over 40 hours per week without being compensated for those additional hours.

If you want to see how much you’re working, you can use a work hours calculator to track your working time.

Is a salary gross or net pay?

An annual salary is the gross pay that you earn per year. This does not take into account income tax, social security, medicare, state and local taxes, or other withholdings. Net pay is the total earnings you receive after all of the above items are withheld from your pay.

Overall, it’s important to under your hourly wage and what that equates to as an annual salary. This allows you to better understand different employment options or job offers, and allows you to better negotiate with current or potential employers.


  1. Internal Revenue Service, Tax Withholding Estimator, https://www.irs.gov/individuals/tax-withholding-estimator