How to Convert Salary to Hourly Rate
The basic formula: Hourly Rate = Annual Salary ÷ (Hours per Week × Weeks per Year). For a standard 40-hour, 52-week year, divide by 2,080. But if you have paid time off, your "effective" hourly rate — the rate your employer is paying you per hour actually worked — is higher.
Why Does PTO Change My Hourly Rate?
With 10 PTO days, you work 2,000 hours instead of 2,080. Your salary ($80,000) divided by 2,000 gives an effective hourly rate of $40.00 — versus $38.46 at the full 2,080 hours. PTO is a valuable benefit that increases your effective compensation.
Using This Calculator for Job Comparisons
When comparing a salaried offer to an hourly role, always normalize to the same basis. Account for differences in hours, PTO, overtime eligibility, and benefits. A $75,000 salaried job with 20 PTO days and full benefits often beats an hourly role paying the same gross without benefits.
Frequently Asked Questions
Divide your annual salary by the number of hours worked per year. Example: $80,000 salary ÷ (40 hrs/week × 52 weeks) = $80,000 ÷ 2,080 = $38.46/hour. If you have 10 PTO days, subtract those working days: $80,000 ÷ (2,080 − 80) = $40.00/hour effective rate.
The standard full-time work year is 2,080 hours (40 hours/week × 52 weeks). However, most workers have paid time off (PTO), holidays, and sick days that reduce actual hours worked. The effective hourly rate accounts for these days off.
PTO reduces the number of days you actually work while your salary remains the same. If you earn $60,000 and have 15 PTO days (120 hours), your effective hourly rate is $60,000 ÷ (2,080 − 120) = $30.61/hour, compared to $28.85 without PTO.
The federal minimum wage remains $7.25/hour as of 2026, unchanged since 2009. Many states have set higher minimums: California ($16.50), New York ($16.00), Washington ($16.28), Massachusetts ($15.00). Check your state's Department of Labor for current minimums.
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must receive 1.5× their regular hourly rate for all hours over 40 in a workweek. Some states (like California) require daily overtime for hours over 8 in a single day.
Federal income tax (depends on bracket and W-4), Social Security 6.2% (up to $176,100 wage base), Medicare 1.45%, plus state income tax if applicable. Pre-tax deductions (401k, health insurance, HSA) reduce your taxable income. Use our Paycheck Calculator for a precise breakdown.
Convert job offers to hourly to compare apples-to-apples. A $90,000 salary with no PTO = $43.27/hour. A $85,000 salary with 20 PTO days = $43.10/hour effective rate. Also factor in benefits, 401k match, and other compensation.
The U.S. median household income is approximately $80,000–$85,000 as of 2026. The median individual full-time worker earns about $60,000. "Good" salary varies significantly by location: $70,000 in rural Mississippi is equivalent to $140,000+ in San Francisco on a cost-of-living-adjusted basis.
Salaried positions often come with benefits, career advancement, and salary predictability but may involve unpaid overtime. Hourly positions offer overtime pay eligibility and more work-life boundaries. Compare total compensation packages, not just the base pay figure.
Freelancer hourly rate = (Desired annual income + Business expenses + Self-employment taxes 15.3%) ÷ Actual billable hours. If you want to net $80,000 with $10,000 expenses and bill 1,000 hours, your rate needs to be: ($80,000 + $10,000 + $13,770) ÷ 1,000 ≈ $104/hour.