Converting between an hourly rate and a salary figure is one of the most common calculations in personal finance — useful when comparing a job offer quoted hourly against one quoted annually, or when estimating income for freelance and contract work.
The formula
At $25/hour for 40 hours a week: weekly pay is $1,000, annual pay is $1,000 × 52 = $52,000, and monthly pay is $52,000 ÷ 12 ≈ $4,333.33.
Worked examples
| Hourly rate | Hours/week | Annual pay |
|---|---|---|
| $18.00 | 40 | $37,440 |
| $32.50 | 35 | $59,150 |
| $45.00 | 20 | $46,800 |
Common mistakes
- Assuming exactly 4 weeks per month. Months vary in length; dividing annual pay by 12 is more accurate than multiplying weekly pay by 4.
- Forgetting unpaid time off. This calculator assumes 52 paid weeks — unpaid leave will lower actual annual income.
- Comparing gross figures to net figures. This tool calculates gross (pre-tax) pay; take-home pay will be lower after taxes and deductions.
Tips
- When comparing two job offers in different formats (hourly vs. salaried), always convert both to the same basis before comparing.
- Factor in benefits — health insurance, retirement matching, and paid time off — which don't show up in a raw salary comparison.
Frequently asked questions
How do I convert an hourly wage to an annual salary?
Multiply the hourly rate by hours worked per week, then multiply by 52 weeks to get the annual figure.
Does this calculator show gross or net pay?
This calculator shows gross (pre-tax) pay. Actual take-home pay will be lower after income tax and other deductions, which vary by location.
How many work weeks are in a year?
This calculator assumes 52 weeks. If you take unpaid time off, subtract those weeks before multiplying for a more accurate annual figure.
References
- Investopedia — General explainer on gross vs. net pay