How to Convert Hourly Pay to an Annual Salary

How to Convert Hourly Pay to an Annual Salary

If you’re paid by the hour, it’s common to wonder what your pay “equals” as a yearly salary—especially when comparing job offers or negotiating a raise. The basic conversion is straightforward, but your real annual earnings can be higher or lower depending on overtime, unpaid time off, seasonal schedules, and benefits.

If you want to run the numbers instantly, use our hourly to salary calculator. If you’re going the other direction, try the salary to hourly calculator. Our assumptions and rounding approach are explained on the methodology page.

The standard formula

The most common way to convert hourly pay to salary assumes a full-time schedule of 40 hours per week for 52 weeks per year.

Annual Salary = Hourly Rate × Hours per Week × 52

This gives a “gross” (pre-tax) annualized number. It’s best thought of as the salary equivalent if you worked that schedule all year with no unpaid time off.

Step-by-step worked example ($22/hour)

Let’s convert $22 per hour to an annual salary using a typical full-time schedule.

Step 1: Choose your weekly hours

Assume 40 hours/week.

Step 2: Multiply hourly rate by weekly hours

$22 × 40 = $880 per week

Step 3: Multiply weekly pay by 52 weeks

$880 × 52 = $45,760 per year

So, $22/hour ≈ $45,760/year if you work 40 hours every week for 52 weeks.

Why the result may not match your actual annual earnings

The simple formula is a clean baseline, but your W-2/annual earnings may differ for practical reasons:

• Unpaid time off: If you take unpaid vacation days or unpaid sick time, your annual pay drops because you’re not earning hours.
• Paid time off (PTO): Many hourly workers do get paid holidays and PTO. If you’re paid for time not worked, your annual earnings may still match the baseline even with time off.
• Variable hours: Retail, hospitality, healthcare, and gig schedules can swing week to week. The “hours/week” input is often an average, not a constant.
• Overtime and premiums: Time-and-a-half, double-time, shift differentials, and weekend premiums can push real pay above the baseline.
• Unpaid breaks: A schedule that looks like “8 hours” may include unpaid lunch. If you’re paid for 7.5 hours/day, the baseline calculation should use 37.5 hours/week, not 40.
• Start dates and gaps: If you didn’t work the full year (new job, leave, layoffs), actual earnings will be lower.

Adjustments for overtime, part-time, and seasonal work

The formula still works—you just need to use realistic hours and add overtime properly.

Part-time conversion

If you work 25 hours/week at $22/hour:

$22 × 25 × 52 = $28,600/year

Part-time annualizing is useful for comparing roles, but remember that benefits eligibility can change drastically below certain hour thresholds.

Seasonal work conversion

If you work 40 hours/week for only 9 months (about 39 weeks) at $22/hour:

$22 × 40 × 39 = $34,320/year

Seasonal schedules are best estimated using the number of weeks you realistically work, not 52.

Overtime adjustment

Overtime is usually paid at 1.5× your hourly rate after 40 hours/week (rules vary by location and role). If you earn $22/hour and typically work 45 hours/week:

• Regular pay: 40 × $22 = $880/week
• Overtime pay: 5 × ($22 × 1.5) = 5 × $33 = $165/week
• Total weekly pay: $880 + $165 = $1,045/week
• Annualized: $1,045 × 52 = $54,340/year

That’s nearly $8,580 more than the $45,760 baseline. For quick calculations with different overtime patterns, use the overtime pay calculator.

Quick reference table: hourly rates to annual salary (40 hours/week)

Below is a quick table using Hourly × 40 × 52 (2,080 hours/year). These are gross annual equivalents.

• $12/hr = $24,960
• $15/hr = $31,200
• $18/hr = $37,440
• $20/hr = $41,600
• $22/hr = $45,760
• $25/hr = $52,000
• $30/hr = $62,400
• $35/hr = $72,800
• $40/hr = $83,200
• $45/hr = $93,600
• $50/hr = $104,000
• $55/hr = $114,400
• $60/hr = $124,800

If your schedule isn’t 40 hours/week, treat these numbers as a starting point and adjust the hours.

How to factor in benefits when comparing hourly vs. salaried roles

Pay rate is only part of compensation. Benefits can easily be worth $5,000–$20,000+ per year depending on the employer and your situation.

When comparing an hourly job to a salaried job, estimate the annual value of:

• Health insurance: Employer-paid premiums can be several hundred dollars per month. Example: $450/month employer contribution ≈ $5,400/year.
• Retirement match: A 401(k) match of 4% on a $60,000 salary is $2,400/year if you contribute enough to receive it.
• Paid time off: Hourly roles vary widely. If a salaried role includes 15 PTO days + 8 holidays, that’s 23 paid days. At a $60,000 salary, the “paid time off value” is already built in, but it matters when comparing to an hourly job that has little or no paid time off.
• Bonuses and commissions: Some salaried roles add variable pay; some hourly roles add shift premiums.
• Tuition assistance, HSA funding, life/disability coverage: Smaller line items that add up.

A practical approach: compute your cash pay first (hourly annualized vs salary), then add a conservative benefit estimate to each side so you’re comparing total compensation.

The overtime advantage: why hourly workers sometimes earn more

Hourly employees often have a built-in advantage when workloads spike: additional hours frequently mean additional pay at premium rates. Salaried employees may be “exempt,” meaning the paycheck stays the same even if the workweek stretches to 50–60 hours.

Example comparison:

• Hourly role: $30/hour, averages 45 hours/week with 5 OT hours at 1.5×.
• Weekly pay: (40 × $30) + (5 × $45) = $1,200 + $225 = $1,425
• Annualized: $1,425 × 52 = $74,100

A salaried offer of $70,000 might look higher than the hourly baseline ($62,400 at $30/hour) but could be lower than what you actually earn once overtime is included.

Comparing offers: a real-world decision scenario

Here’s a practical way to compare an hourly offer to a salaried offer using actual assumptions.

Offer A (hourly)

• $22/hour
• Average 43 hours/week (3 hours overtime)
• Modest benefits, estimated employer value: $3,000/year

Cash pay estimate:

• Regular: 40 × $22 = $880/week
• OT: 3 × ($22 × 1.5) = 3 × $33 = $99/week
• Total: $979/week
• Annual cash: $979 × 52 = $50,908

Total comp estimate: $50,908 + $3,000 = $53,908

Offer B (salary)

• $52,000/year salary
• Expected workload: ~47 hours/week (no overtime pay)
• Better benefits, estimated employer value: $9,000/year

Total comp estimate: $52,000 + $9,000 = $61,000

How to make the decision

• Compare total compensation: Offer B wins on benefits in this scenario.
• Convert to “effective hourly”: If Offer B averages 47 hours/week, effective hourly is $52,000 ÷ (47 × 52) ≈ $21.29/hour. Offer A’s effective hourly with OT is $50,908 ÷ (43 × 52) ≈ $22.78/hour.
• Check schedule risk: If Offer A’s overtime is not guaranteed, your pay could fall back toward $45,760. If Offer B’s workload routinely climbs, the effective hourly rate drops further.
• Factor in priorities: Predictable income, health coverage, retirement match, and PTO may outweigh a higher effective hourly rate—especially if you’d otherwise buy insurance yourself or miss unpaid days.

Bottom line

To convert hourly pay to annual salary, start with Hourly Rate × Hours/Week × 52. Then adjust for what actually happens in your job: overtime, part-time schedules, unpaid time, and seasonal work. Finally, compare offers using total compensation (pay + benefits) and an effective hourly rate based on realistic weekly hours.

To run your own numbers quickly, use the hourly to salary calculator, and if you’re evaluating a salaried offer against long workweeks, check the salary to hourly calculator. For overtime-heavy roles, the overtime pay calculator will give you a more accurate estimate.