The formula:
Hourly rate = Annual salary ÷ 2,080
2,080 = 40 hours/week × 52 weeks/year.
Examples
| Salary | Hourly |
|---|---|
| $30,000 | $14.42 |
| $40,000 | $19.23 |
| $50,000 | $24.04 |
| $60,000 | $28.85 |
| $75,000 | $36.06 |
| $100,000 | $48.08 |
| $150,000 | $72.12 |
| $200,000 | $96.15 |
Quick mental shortcut
Drop three zeros and divide by 2. $50,000 → $25/hr (rough). For more precision, divide by 2.08.
What if I get vacation time
If you want a "paid working hours" rate (excludes vacation):
- 2 weeks vacation: divide by 2,000
- 3 weeks vacation: divide by 1,960
- 4 weeks vacation: divide by 1,920
Example: $50K with 2 weeks vacation = $50,000 / 2,000 = $25/hr.
What about taxes
The formula gives gross hourly. For after-tax:
- Multiply by ~0.7 to estimate federal + state + payroll taxes
- $50K gross → ~$24/hr gross → ~$17/hr net
Tax rates vary by location and circumstances; this is a rough estimate.
Salary vs hourly comparison — what's missing
Salaried roles often include:
- Health insurance
- 401(k) match
- Paid time off
- Sick leave
- Bonus eligibility
Add roughly 15-25% to the hourly equivalent to compare apples to apples. A $50K salary with full benefits is closer to $30/hr equivalent on a gig contract.
Reverse calculation
Hourly to annual: Hourly rate × 2,080 = annual salary
- $20/hr → $41,600
- $25/hr → $52,000
- $30/hr → $62,400
- $40/hr → $83,200
For more on specific values: our salary calculators.
When the formula breaks
- Salaried exempt roles often work more than 40 hours. Real hourly is lower.
- Hourly with overtime can earn more. Real hourly with OT can be higher.
- Tipped roles — formula doesn't apply.
- Commission-heavy roles — variable comp not captured.
The bigger pattern
Hourly-to-annual math is a rough comparison. The real comparison is total compensation (base + bonus + equity + benefits) and quality of life (hours worked, flexibility, growth).
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Frequently Asked Questions
- What's the formula for converting salary to hourly?
- Annual salary ÷ 2,080 = hourly rate. 2,080 is 40 hours/week × 52 weeks/year. So $50,000/year = ~$24/hour.
- Should I subtract vacation hours?
- If you want a 'paid working hours' rate, yes. 2,000 hours (50 weeks of work, 2 weeks vacation) is closer to the actual hours you'll work.
- How do benefits affect the comparison?
- Salaried roles often include benefits (healthcare, retirement match, paid leave) that hourly roles don't. Add 15-25% to the hourly equivalent if comparing apples to apples.
- Is the real hourly rate lower because of taxes?
- Yes for take-home, no for gross. If you want take-home hourly, multiply by ~0.7-0.75 to estimate after taxes.