How the Hourly Pay & Salary Calculator Works
Hourly and salaried pay can be difficult to compare because they are usually expressed differently. An hourly role might advertise $25 per hour, while another employer offers $55,000 per year. This calculator converts both into the same pay periods so you can compare them more easily.
For hourly workers, the calculator uses your hourly rate, regular weekly hours, weeks worked per year and any overtime you choose to include. For salaried workers, it uses annual salary and your expected working schedule to estimate an effective hourly rate.
All results are gross-pay estimates before taxes, benefits and other deductions.
How to Convert Hourly Pay to an Annual Salary
If you don’t work overtime, the basic calculation is:
Hourly rate × hours worked per week × weeks worked per year = annual gross pay
For example, suppose you earn $25 per hour, work 40 hours per week, and work 52 weeks per year:
$25 × 40 × 52 = $52,000 per year
The same calculation can then be converted into monthly, semimonthly, biweekly, weekly and daily estimates.
Changing the number of weeks worked is important if you take unpaid time off or work seasonally. Someone working 42 weeks per year will have a substantially different annual income from someone earning the same hourly rate for all 52 weeks.
How to Convert an Annual Salary to an Hourly Rate
To estimate the hourly equivalent of a salary, divide annual salary by the number of hours you expect to work during the year:
Annual salary ÷ (weekly hours × weeks worked) = effective hourly rate
For example, a $50,000 annual salary based on 40 hours per week for 52 weeks represents approximately $24.04 per hour.
This can be especially useful when comparing a salaried position with an hourly job. Indeed similarly recommends converting compensation into the same unit when evaluating hourly and annual pay.
How Overtime Is Calculated
The calculator lets you enter overtime hours and choose your own overtime multiplier rather than automatically applying a particular country’s employment law.
For example, if you earn $20 per hour and select a 1.5× multiplier, your selected overtime rate becomes $30 per hour.
In the United States, federal law generally requires covered, nonexempt employees to receive at least 1.5 times their regular rate for hours worked beyond 40 in a workweek. However, exemptions and additional state rules can apply.
Because employment rules differ by location and worker classification, OnNetJobs does not determine whether you are legally entitled to overtime. Enter the rate that applies to your situation.
Gross Pay vs. Take-Home Pay
The figures produced by this calculator are gross pay, not the amount you will necessarily receive in your bank account.
Gross pay is what you earn before deductions. Net pay, often called take-home pay, is what remains after applicable taxes and other deductions. The IRS makes the same distinction between gross and net pay.
Your actual take-home amount can depend on factors such as taxes, benefits, pension contributions and other deductions. In the U.S., for example, income-tax withholding also depends on earnings and information supplied to an employer on Form W-4.
Comparing Two Pay Rates
The What if? section lets you compare your current compensation with another hourly rate or annual salary.
For example, increasing an hourly rate from $20 to $21 while working 40 hours per week for 42 weeks raises estimated annual gross pay from $33,600 to $35,280.
That’s an increase of:
- $1,680 per year
- $140 per month
- 5%
This can help when considering a raise, negotiating compensation or comparing two job offers.
Frequently Asked Questions
How much is $20 an hour per year?
At 40 hours per week for 52 weeks, $20 per hour equals $41,600 in annual gross pay before overtime, taxes or deductions.
How much is $25 an hour annually?
Working 40 hours per week for 52 weeks at $25 per hour produces approximately $52,000 per year in gross pay.
How many working hours are in a year?
A common estimate is 2,080 hours, based on 40 hours per week for 52 weeks. Your actual number may be lower or higher depending on your schedule, unpaid leave and working weeks.
Is monthly salary simply annual salary divided by 12?
For an annual salary estimate, yes. This calculator divides annual gross compensation by 12 to produce its monthly figure. Your actual paycheck amount depends on your employer’s pay schedule and deductions.
Does this calculator include taxes?
No. The calculator estimates gross compensation only. Taxes and withholding vary according to factors that cannot be determined from hourly rate or annual salary alone.
Is overtime always paid at 1.5 times the hourly rate?
No. Rules depend on jurisdiction, employment classification and other circumstances. The calculator therefore allows you to choose the overtime multiplier instead of assuming that 1.5× applies to everyone. In the U.S., 1.5× is the federal standard for covered, nonexempt employees after 40 hours in a workweek, subject to exemptions and other rules.
Can I use this calculator to compare job offers?
Yes. Converting both offers to annual, monthly and effective hourly compensation gives you a common basis for comparison. Compensation is only one factor, though; benefits, paid leave, working hours, bonuses and other terms can also affect the overall value of an offer.