Hourly to annual salary: how to convert pay
To convert hourly pay to annual salary, multiply the hourly rate by the hours you work per week and by the weeks you work per year. A common shortcut is 40 hours and 52 weeks, which is 2,080 hours. Adjust for unpaid time off, overtime and the actual hours in your contract.
At a glance
- Annual = hourly rate x hours per week x weeks per year.
- Full-time shortcut: hourly rate x 2,080.
- Annual to hourly: divide by 2,080 (or your real hours).
- Pre-tax figures are before deductions.
- Check overtime rules for your job and state.
Formulas
| Convert | Formula |
|---|---|
| Hourly to weekly | Rate x hours per week |
| Hourly to annual | Rate x hours per week x 52 |
| Annual to monthly | Annual / 12 |
| Annual to hourly | Annual / (hours per week x 52) |
Worked example (made-up numbers)
An hourly rate of $20 for 40 hours and 52 weeks gives $41,600 a year. In reverse, an annual figure of $42,000 divided by 2,080 hours is about $20.19 an hour.
Adjust for real life
- Unpaid time off. If you take two unpaid weeks, use 50 weeks.
- Paid leave and holidays. Paid time off is still paid, so keep 52 weeks.
- Part-time. Use your true weekly hours.
- Overtime. Many non-exempt employees are owed extra pay for hours over 40 in a week under federal rules, and some states have stricter rules. Check the Department of Labor's Wage and Hour Division.
- Taxes. Figures here are before tax and deductions.
Step by step: convert your own pay
- Write down your hourly rate and your contract's weekly hours.
- Count the weeks you expect to be paid. Paid holidays and paid leave count as paid weeks.
- Multiply rate by weekly hours by paid weeks for the annual figure.
- Divide the annual figure by 12 for a monthly figure, or by 52 for a weekly one.
- If you expect overtime, calculate it separately so you can see base and extra pay.
- Label the result "before tax".
Quick reference: common weekly hours
| Hours per week | Hours per year (52 weeks) |
|---|---|
| 20 | 1,040 |
| 30 | 1,560 |
| 35 | 1,820 |
| 40 | 2,080 |
What federal rules say about overtime
The Department of Labor says covered employees who are not exempt must receive overtime pay at time and one-half their regular rate for hours over 40 in a workweek. A workweek is a fixed 168-hour period and hours cannot be averaged across weeks. So a person paid hourly who works 45 hours in one week and 35 the next is owed overtime for the first week. Some states have their own overtime rules, so check your state labor department.
Common mistakes
- Using 52 weeks when you take unpaid time off.
- Subtracting paid holidays, which are still paid.
- Comparing an hourly rate to a salary without noticing different weekly hours.
- Forgetting that exempt salaried staff may not receive overtime, while hourly staff often do.
- Treating the result as take-home pay when it is before tax.
Using the numbers
Compare offers fairly by converting each to the same yearly figure. See total compensation and pay research.
Frequently asked questions
Is salary the same as annual pay? Salary is usually a fixed yearly amount. Annual pay may include bonus.
Are contractors paid the same way? Contractors often cover their own taxes and benefits, so compare carefully.
How many hours are in a full-time year? The common shortcut is 40 hours times 52 weeks, which is 2,080 hours. Use your real hours if they differ.
Is the result before or after tax? Before tax and other deductions.
What about India? Pay is usually discussed as CTC. See CTC versus in-hand.
Next step
Convert your offer to a yearly figure and compare it with your current pay.
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.