When you actually need this
Three real cases:
Negotiating a job offer. A recruiter offers $32 an hour. Is that more or less than the $65,000 salaried role you’re already considering? Hourly × 40 × 52 = $66,560, slightly more on paper, but freelance/contract roles usually don’t include benefits, so the comparison gets murkier. The calculator gets you the basic math; benefits arithmetic is up to you.
Pricing freelance work. You want to make $100K a year freelancing. How much do you need to charge per hour to hit that? At 40 billable hours per week × 46 working weeks (subtracting unpaid time off and dead admin weeks), you’d need about $54/hour. Most freelancers underestimate this number and end up earning less than employees in the same field.
Quick budgeting. Your boss says “the rate is $44/hour” and you need to know if that’s $90K territory or $40K. Quick math: $44 × 2,080 (40 hrs × 52 wks) = $91,520. Done.
Why “annual salary” isn’t a single number
Standard salaried jobs assume 2,080 working hours per year (40 × 52). Most workers don’t actually log 2,080 hours though, between paid vacation, holidays, sick days, and personal days, real worked hours are closer to 1,800-1,900. For most salary↔hourly conversions, the difference doesn’t matter, both numbers refer to paid time, and salaried workers get paid for vacation.
For freelancers and contractors, the math is different. No paid time off means the hourly rate has to absorb vacation, sick days, and inevitable gaps between contracts. A reasonable working-weeks number for a self-employed person is 44-48 instead of 52. The calculator lets you adjust this directly.
Common conversion benchmarks
Quick mental-math anchors:
- $15/hour = $31,200/year (federal minimum-ish)
- $20/hour = $41,600/year
- $25/hour = $52,000/year
- $35/hour = $72,800/year
- $50/hour = $104,000/year (six-figure threshold)
- $75/hour = $156,000/year
- $100/hour = $208,000/year (mid-tier consulting)
The fastest reverse mental math: divide annual salary by 2,000 to get a rough hourly rate. So $80K ÷ 2 = $40/hour. That’s a few percent off from the exact figure but close enough for most conversations.
What the calculator doesn’t include
- Taxes: take-home pay is usually 25-35% less than gross salary in the US, depending on state and filing status.
- Benefits: health insurance, 401k matching, equity, and PTO can be worth 20-30% of salary on top of the cash. Hourly contractors usually don’t get these.
- Self-employment tax: 1099 contractors pay both halves of payroll tax (15.3%), which a W-2 employee splits with the employer.
- Overtime: paid hourly workers get 1.5x past 40 hours/week (US rules); salaried exempt employees don’t.
If you’re comparing a W-2 salary to a 1099 contract rate, multiply the contract rate by about 0.7 to get a fair-comparison “salary equivalent” after the extra taxes and missing benefits.
Frequently asked questions
Why do my paystub numbers not match? Paystub deductions for tax, retirement contributions, insurance, and FSA reduce gross salary to net pay. This calculator works in gross. To estimate net, subtract about 30% from the annual gross.
How many “working weeks” should I use? For salaried W-2 employees, 52 (you get paid for vacation). For hourly W-2 employees, 50-51 (you usually don’t). For 1099 freelancers, 44-46 (more realistic).
What about per-diem rates? Some healthcare and trades roles pay daily. Convert to hourly first (per-diem ÷ shift length) then run the calculator.
Is overtime included? No, the calculator assumes a flat hourly rate. For roles with significant overtime, calculate base separately and add overtime hours × 1.5x rate × weeks.