Salary to Hourly: Convert Annual Pay to an Hourly Rate

Use the actual paid schedule

Start with annual base salary before taxes and deductions. Multiply paid hours per week by paid working weeks per year. If you work 40 hours for 52 weeks, the annual hours are 2,080. If the salary covers fewer weeks or a shorter schedule, use those figures instead. Do not include overtime hours unless the salary is intended to compensate for them. State your assumptions so another person can reproduce the estimate.

Separate base pay from benefits

A salary may include a bonus, commission, health insurance, retirement match, paid leave, or other benefits. These items do not all convert into cash wages, and their value depends on eligibility and use. Calculate the base hourly equivalent first, then compare benefits in separate columns. For contractors, account for unpaid time, business expenses, insurance, and taxes before comparing a contract rate with an employee salary.

Compare offers on the same basis

Use gross pay for both offers and apply the same number of work hours. If one job regularly expects longer hours, calculate an effective hourly rate using those hours as a second scenario. The result still will not show take-home pay, which depends on tax rules and deductions. Review the written offer and employment classification before deciding; a quick conversion is a comparison aid, not legal or tax advice.

Worked example

$62,400 annual salary ÷ (40 hours/week × 52 weeks)
= $62,400 ÷ 2,080
= $30.00 gross per hour equivalent

Is salary divided by 2,080 always accurate?

Only for the assumption of 40 hours per week for 52 weeks. Use your actual schedule and paid weeks for a closer estimate.

Reference and further reading

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