About this calculator
Converting an annual salary to an hourly rate is the cleanest way to compare a salaried job against contract work, or to size up the real value of overtime. The basic math is hourly = annual / (hours × weeks) — typically annual / 2,080 for a standard 40 hr/week, 52-week year. This calculator adds PTO so you can see your true effective rate.
The PTO adjustment that matters
If you have 2 weeks of paid vacation, you're paid for 52 weeks but actually work 50. So your true earned-per-hour-worked rate is annual / (hours × 50), which is roughly 4% higher than the naive calculation. Add holidays and personal days, and the gap widens — sometimes 8–10%. This matters when comparing a salaried role to a 1099 contract that explicitly excludes PTO.
Salaried vs hourly — the trade-offs
- Hourly protects you under FLSA — overtime pay (1.5× over 40 hrs in most US jurisdictions, sometimes 2×). The downside: irregular paychecks, no salary security.
- Salaried exempt means no overtime regardless of hours. A 60-hour-week "$100k" job pays $32/hr effective — meaningfully worse than a $40/hr hourly role.
- Salaried non-exempt (rare but real) gets the salary plus overtime — best of both worlds.
Common gotchas
Job postings sometimes inflate "annualized" hourly rates by assuming 40 hrs/week and 52 weeks — but the actual schedule might be 30 hours or seasonal. Always confirm hours-per-week and weeks-per-year before comparing offers. And remember: contract hourly rates typically need to be ~30% higher than W-2 rates to net the same after self-employment tax and benefits.