How do I convert my annual salary to an hourly rate?

Divide the salary by the hours you actually work in a year, which is hours per week multiplied by paid weeks per year. A 65,000 salary worked 40 hours a week across 50 paid weeks is 2,000 hours, giving 32.50 an hour.

Should paid vacation weeks count in the hours total?

Count them as paid weeks, since the salary continues to be paid during them, but do not count hours you did not work. The calculator's 'paid weeks per year' input is meant to capture the weeks you are compensated for, typically 48 to 52 depending on holiday and leave entitlement.

Why does unpaid overtime lower my real hourly rate?

Because the salary stays fixed while the hours it is divided across grow. On a 60,000 salary, working the contracted 40 hours a week for 50 weeks gives 30.00 an hour; regularly working 50 hours instead drops the rate to 24.00 an hour for the same pay.

Is a salaried job's hourly rate comparable to a contractor's rate?

Not directly. A contractor's quoted rate usually has to cover its own health insurance, retirement saving, paid leave and unpaid downtime between contracts, all of which an employer typically funds separately for a salaried worker, so the contractor rate needs to be well above the salaried equivalent to match total compensation.

Does this calculator account for overtime pay rules?

No, it produces a plain arithmetic rate from the hours and salary you enter. Whether extra hours are legally entitled to a premium rate depends on your jurisdiction's overtime and minimum wage rules and, in the US, on whether the role meets the federal exemption tests.

What hours-per-year figure is typical for a US full-time salary?

A common planning range is 1,900 to 2,080 hours a year once holidays and typical leave are subtracted from a 40-hour, 52-week baseline. Numbers well outside that range usually mean either a part-time schedule or genuine unpaid overtime being worked.

Salary to hourly converter

Turning a yearly salary into an hourly figure only works if you divide by the hours you actually put in, not the 2,080 that a generic 40-and-52 assumption gives you. Once unpaid overtime, a shorter working year, or a compressed week are folded into the denominator, the real rate per hour often looks very different from the number a job ad implies.

Why the hours you enter matter more than the salary

A 72,000 salary worked over a textbook 40-hour week and 52 paid weeks comes out at 34.62 an hour. Cut the paid weeks to 48, which is closer to what someone with two weeks of unpaid leave and a handful of public holidays actually clocks, and the same salary becomes 37.50 an hour, because the yearly total is now spread over fewer hours.

That gap runs the other way just as easily. A salaried role advertised as 40 hours that regularly runs to 45 or 50 hours of unpaid overtime quietly erodes the rate: the annual pay has not changed, but the hours it is divided across have grown.

As a benchmark, most full-time US salary calculations settle somewhere between 1,900 and 2,080 working hours a year once typical holiday and sick time are subtracted from 52 weeks. Anything you enter above that range should reflect real unpaid extra hours, not a rounding choice.

Three examples with different inputs

A support engineer on 55,000 who works a standard 37.5-hour week for all 52 paid weeks has 1,950 working hours a year, giving an effective rate of 28.21 an hour and a daily rate of 225.68 across a five-day week.

A marketing manager on 90,000 who is nominally full time but regularly logs 45 hours a week, taken over 50 paid weeks after two weeks of unpaid leave, works 2,250 hours a year. The same salary that looked like 45.00 an hour on a 40-hour, 40-week naive guess actually pays 40.00 an hour once the real hours are used.

A retail team lead moving from an hourly job at 22.00 to a 46,000 salaried role, working 42 hours a week across 50 paid weeks, is working 2,100 hours a year for an effective 21.90 an hour. The promotion added a title and, on this arithmetic, took nine cents an hour off the pay rate before any overtime is counted.

Where the arithmetic runs out of context

Dividing salary by hours produces a cash rate, not a compensation rate. It says nothing about employer-paid health insurance, retirement matching, or paid leave, all of which are real value that an hourly contractor typically has to buy separately, so a straight comparison against a contractor's quoted rate understates the salaried job.

The calculation also assumes every one of the hours entered is actually worked at the same intensity and none of it is paid at a premium. It cannot tell the difference between 45 hours that includes 5 hours of legally required overtime pay and 45 hours that is unpaid, because both are just a number of hours divided into the same salary.

Because the paid-weeks figure is doing most of the work in the result, the formula is only as accurate as your estimate of unpaid time off. Guessing 52 weeks when you actually take three weeks of unpaid leave overstates the true hourly rate by roughly 6%.

Salaried versus hourly rules differ by jurisdiction

In the United States, whether a salaried employee is even entitled to overtime pay depends on meeting the Fair Labor Standards Act's duties test and being paid above the federal salary threshold administered by the Department of Labor's Wage and Hour Division; below that threshold, hours worked beyond 40 in a week generally must be paid at time and a half regardless of salary status.

In the United Kingdom, the calculation is complicated by contracted hours versus the National Minimum Wage rules, which check average hourly pay across a pay reference period rather than a single stated rate, so a salaried worker doing regular unpaid overtime can fall foul of minimum wage law even while nominally earning well above it.

Paid weeks per year also shift with local public holiday counts: US employers commonly offer six to eleven paid holidays, while many EU countries mandate at least twenty statutory paid leave days on top of public holidays, so the same nominal salary converts to a noticeably different hourly figure depending on where the job is based.

Frequently asked questions

How do I convert my annual salary to an hourly rate?: Divide the salary by the hours you actually work in a year, which is hours per week multiplied by paid weeks per year. A 65,000 salary worked 40 hours a week across 50 paid weeks is 2,000 hours, giving 32.50 an hour.
Should paid vacation weeks count in the hours total?: Count them as paid weeks, since the salary continues to be paid during them, but do not count hours you did not work. The calculator's 'paid weeks per year' input is meant to capture the weeks you are compensated for, typically 48 to 52 depending on holiday and leave entitlement.
Why does unpaid overtime lower my real hourly rate?: Because the salary stays fixed while the hours it is divided across grow. On a 60,000 salary, working the contracted 40 hours a week for 50 weeks gives 30.00 an hour; regularly working 50 hours instead drops the rate to 24.00 an hour for the same pay.
Is a salaried job's hourly rate comparable to a contractor's rate?: Not directly. A contractor's quoted rate usually has to cover its own health insurance, retirement saving, paid leave and unpaid downtime between contracts, all of which an employer typically funds separately for a salaried worker, so the contractor rate needs to be well above the salaried equivalent to match total compensation.
Does this calculator account for overtime pay rules?: No, it produces a plain arithmetic rate from the hours and salary you enter. Whether extra hours are legally entitled to a premium rate depends on your jurisdiction's overtime and minimum wage rules and, in the US, on whether the role meets the federal exemption tests.
What hours-per-year figure is typical for a US full-time salary?: A common planning range is 1,900 to 2,080 hours a year once holidays and typical leave are subtracted from a 40-hour, 52-week baseline. Numbers well outside that range usually mean either a part-time schedule or genuine unpaid overtime being worked.

Sources

U.S. Department of Labor — Earnings thresholds for the EAP overtime exemption — Sets out the federal salary threshold and duties tests that decide whether a salaried employee must be paid overtime under the FLSA.
U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation — Private-industry compensation averaged 45.38 per hour in March 2025, with wages and salaries making up 70.3% of that cost and benefits the remaining 29.7%.