Hourly to Salary

The US Bureau of Labor Statistics defines a standard full-time year as 40 hours/week × 52 weeks = 2,080 hours. Most salary comparisons, hourly rate quotes, and contractor bids implicitly use this number. So a $50/hour contract rate translates to $104,000/year if you work every week — but only if you actually bill 2,080 hours, which most contractors don't.

When converting an hourly job to an equivalent salary, the question is whether you're paid through your time off. W-2 hourly employees usually aren't — if you take a week off unpaid, your annual income drops by 1/52. So a more honest conversion uses 50 weeks (2 weeks unpaid vacation) or even 48 weeks (vacation + sick days + holidays unpaid). Salaried employees keep getting paid through PTO, so 52 weeks is correct for them.

Independent contractors should not just match a salaried rate — they need a meaningful premium to cover what an employer otherwise pays. Self-employment tax adds 15.3% (vs. 7.65% for W-2). Health insurance, retirement match, paid time off, and unpaid downtime between gigs typically add another 25–35%. A common rule of thumb: take the equivalent W-2 salary, divide by 1,500 billable hours (not 2,080), then add 30–40% on top.

Example: a $100,000 W-2 job is roughly equivalent to a $100,000 ÷ 1,500 = ~$67/hour contractor rate, then ×1.35 = ~$90/hour. Anyone billing significantly less is subsidizing their client's payroll.

Under the US Fair Labor Standards Act, non-exempt hourly workers earn 1.5× their base rate for hours worked beyond 40 in a single workweek. Some states (California, Colorado, Alaska, Nevada) also require daily overtime above 8 hours. This calculator uses straight time — if you regularly work overtime, add a separate line item: OT hours × hourly rate × 1.5 × weeks worked.

Shift differentials, on-call pay, and weekend premiums layer on top of the base hourly rate and aren't captured here. For salary-to-hourly conversions on a job posting, remember the posted salary is gross — pre-tax, pre-401(k), pre-insurance. Your real take-home is typically 65–75% of the gross figure depending on state and benefit elections. Use our Paycheck Estimator to model that side.

Headline hourly or salary numbers undersell total compensation for most W-2 jobs. The US Bureau of Labor Statistics reports that benefits (employer-paid insurance, retirement contributions, paid leave, payroll taxes) average roughly 30% on top of base wages for private-industry workers — meaning a $50,000 base salary actually costs the employer closer to $65,000.

For an apples-to-apples comparison between a W-2 offer and a 1099/contract offer, gross up the contract rate to cover the benefits gap. The biggest individual line items: employer-side payroll tax (7.65%), health insurance (often $6,000–$15,000/year for family coverage), 401(k) match (typically 3–6% of salary), and paid time off (15–25 days/year = 6–10% of compensation).

Equity compensation (stock options, RSUs) is harder to convert. Treat unvested RSUs at expected post-tax value using current share price and the company's vesting schedule, then discount by the probability you'll stay through vest. Treat startup options at zero unless there's a near-term liquidity event — most early-stage options never pay out.

At a standard 40 hours/week × 52 weeks (2,080 hours/year): $15/hour = $31,200, $20/hour = $41,600, $25/hour = $52,000, $30/hour = $62,400, $40/hour = $83,200, $50/hour = $104,000, $75/hour = $156,000, $100/hour = $208,000.

Part-time at 20 hours/week × 52 weeks (1,040 hours/year): $20/hour = $20,800, $30/hour = $31,200, $40/hour = $41,600. Useful for evaluating side income, consulting work, or transitional retirement schedules.

Salaried jobs converted back to hourly assume you actually work 40 hours/week — many salaried professionals work 45–55. A $100,000 salary at 50 hours/week is really $38.46/hour, not $48.08. If you're considering a return to hourly work or a contract role, the higher hour count is usually the more honest baseline.