Hourly Wage Calculator

The conversion depends entirely on how many hours you assume, and different purposes require different assumptions.

The same salary produces an hourly rate varying by 23% depending on the assumption. The 2,080-hour convention is the most common default in US payroll, but it includes paid time off - so it understates the rate you actually receive per hour worked.

Note. For comparing a salaried role against an hourly role, use hours genuinely worked. For comparing take-home value, use paid hours. Mixing the two produces a misleading comparison in either direction.

• Time-and-a-half - 1.5x the base rate, commonly applied beyond 40 hours a week in the US, and often on weekends or holidays elsewhere.
• Double time - 2.0x, typically for public holidays, night shifts or hours beyond a threshold.
• Annualised salaries - exempt employees usually receive no overtime premium regardless of hours worked, which can push effective hourly rates far below the headline figure.
• Voluntary extra hours - on a fixed salary they reduce the effective hourly rate rather than increase it.

Adding 320 hours a year - under seven hours a week - cuts the effective rate by 12% on a fixed salary. If you are evaluating a role that regularly runs long, calculate the rate at the hours you will actually work, not at the contract figure.

The wage is one component. For a fair comparison, value the rest and convert it to an hourly figure too.

• Employer retirement contribution - a match of, say, 4% of salary is worth $2,400 a year on $60,000 - about $1.15 an hour at 2,080 hours.
• Health insurance - the employer premium share can be worth several thousand dollars annually and does not appear on the payslip.
• Paid time off - paid holidays and sick leave raise the effective hourly rate because you are paid for hours not worked.
• Commute and expenses - a long commute reduces the effective hourly rate in time as well as money. An unpaid 90-minute round trip on 230 working days is 345 hours - roughly 16% of a full-time year.
• Unpaid overtime - the single biggest hidden reduction for salaried staff.

1. Compute the effective hourly rate on both offers using realistic hours for each - not the same assumption applied to both.
2. Add employer contributions to the value of each.
3. Subtract commuting time and cost, which differ more between offers than most people allow for.
4. Weigh the stability premium. Contract and freelance rates should be higher than salaried equivalents to compensate for unpaid gaps, self-funded benefits and no employer retirement contribution.
5. Consider progression. A lower current rate on a role with clear advancement may beat a higher static rate.
6. Check how the rate changes with overtime - whether extra hours are paid, unpaid, or unavailable.

Note. Contractors should typically seek a substantial premium over the equivalent employee rate to cover benefits, unpaid time between contracts, equipment, insurance and employer taxes. The exact premium depends on the market, but a rate equal to the employee equivalent is almost always too low.