Salary to Hourly Calculator

Standard formula: hourly rate = annual salary / (hours per week × weeks per year). For a full-time 40h/week × 52 weeks = 2080 hours/year, $60,000 / 2080 = $28.85/hour. For 35h/week (some EU/UK conventions) × 52 = 1,820 hours, same salary = $32.97/hour. The 2,080-hour convention is the W-2 standard used by most U.S. employers, BLS (Bureau of Labor Statistics), and federal pay schedules — though federal civilian employees often use 2,087 (see next FAQ).

2,080 = 40 hours × 52 weeks. Simple, widely used by private sector. 2,087 = the AVERAGE workdays per year averaged over a 28-year cycle (which accounts for leap years and how holidays fall on weekends). 5 U.S.C. §5504(b) requires federal Executive Branch annual-to-hourly conversion to use 2,087 — meaning a federal GS-15 step 1 at $123,750 converts to $59.30/hour (2,087-hour basis), not $59.50/hour (2,080-hour basis). Private sector almost universally uses 2,080. The 7-hour difference creates rounding noise on overtime and prorated pay calculations.

The Fair Labor Standards Act (29 U.S.C. §201 et seq.) distinguishes "exempt" employees (no overtime required) from "non-exempt" (overtime at 1.5× regular rate for hours over 40/week). To be EXEMPT, all three tests must be met: (1) SALARY BASIS — paid a fixed salary, not hourly; (2) SALARY LEVEL — at least $844/week ($43,888/year) per the 2024 DOL rule, scheduled to rise to $1,128/week ($58,656/year) effective January 1, 2025 — but a Texas federal district court VACATED the 2024 rule in November 2024, returning the threshold to the prior $684/week ($35,568/year). DOL appealed; the ultimate threshold for 2025 is in legal limbo as of early 2026. (3) DUTIES TEST — Executive, Administrative, Professional, Computer, or Outside Sales role per 29 CFR §541.

Non-exempt employees: §7(a) of FLSA mandates 1.5× the "regular rate of pay" for all hours over 40 in a single workweek. Regular rate = total compensation for the week ÷ total hours worked — INCLUDES non-discretionary bonuses, shift differentials, on-call pay. Example: $25/hour base + $100 attendance bonus over 50 hours = ($25 × 50 + $100) / 50 = $27/hour regular rate. Overtime owed: 10 hours × $27 × 0.5 (the OVERTIME premium beyond what was already paid) = $135. Some states (CA, AK, NV) require daily overtime: 1.5× over 8/day, 2× over 12/day. CA also has 7th-consecutive-day overtime.

Five common pay periods: annual, monthly (12/yr), semi-monthly (24/yr — typically 1st and 15th), biweekly (26/yr), weekly (52/yr). Conversion factors from annual: monthly = / 12, semi-monthly = / 24, biweekly = / 26, weekly = / 52. WATCH OUT: biweekly is NOT the same as twice a month. Biweekly gives 26 pays per year (52 weeks / 2); semi-monthly gives 24 pays per year. Three months a year, biweekly employees get THREE paychecks. Annual salary calculations same either way, but cash flow timing differs.

No — this converter operates on GROSS pay only. To estimate net (take-home) pay, run the result through /paycheck-calculator/ which applies: federal income tax (10-37% by bracket), Social Security 6.2% up to $168,600 (2025 wage base), Medicare 1.45%, Additional Medicare 0.9% over $200k single (per employer), state income tax (0-13.3% CA), local tax (NYC ~3.876%, Philadelphia ~3.79%, etc.), SDI / SUI / PFL where applicable, plus pre-tax deductions like 401k, HSA, FSA, health insurance. Net pay is typically 60-78% of gross for typical W-2 employees.

Federal: $7.25/hour, set by FLSA §6 in 2009 — unchanged for 16 years (longest period without increase in the FLSA's history). 30 states + DC + many cities have HIGHER minimums; the actual minimum wage in 2025 ranges from $7.25 (federal floor, 20 states) to $17.95 (Washington state, Tukwila-specific). Tipped workers: federal cash wage $2.13 + tips making up to $7.25/hour — many states have ELIMINATED the tipped cash-wage credit (CA, WA, OR, NV, MN, MT, AK, HI, AZ). Federal contractors: Executive Order 14026 sets $17.20/hour for 2025 work under new contracts.

MIT's Living Wage Calculator (livingwage.mit.edu) computes location-based minimum income needed to cover housing, food, transportation, healthcare. 2024 national average for a single adult: ~$22/hour ($45,760 annual). For a single parent with one child: ~$35/hour ($72,800). For two working adults + two kids: ~$25/hour each. These exceed federal minimum wage everywhere. State-by-state range: Mississippi single adult $17.20/hour; San Francisco $32/hour; rural Alabama $18/hour. Useful framing when negotiating salary or evaluating job offers against location cost of living.

1099 independent contractors must charge HIGHER than employee rates to net the same income, because: (a) they pay both halves of Social Security + Medicare (15.3% SE tax vs 7.65% as employee); (b) no employer 401k match (typically 3-6% of salary); (c) no employer healthcare ($8-15k/year value); (d) no PTO; (e) no unemployment safety net. Rule of thumb: contractor rate = employee equivalent × 1.5-2.0. Example: $50/hour W-2 employee earning $104k → equivalent 1099 rate $75-100/hour to net the same after benefits + SE tax. ABC test (CA AB-5) and IRS 20-factor test classify many workers as employees regardless of contract.

For total-compensation comparisons, divide TOTAL gross (base + bonus + commissions + shift differentials + employer 401k match + employer health insurance value + ESPP discount) by total hours. Example: $75k base + $10k annual bonus + $9k employer health + $4k 401k match = $98k effective annual / 2,080 = $47.12/hour effective. The base rate of $36.06/hour materially understates real comp. Useful when comparing offers across structures: a $90k base + 20% bonus vs $110k base + no bonus aren't equivalent — the bonus-laden offer is riskier (often not 100% paid) and reaches lower effective hourly rate if bonus pays under.

Three scenarios under FLSA: (1) IF the salary fails the SALARY LEVEL test (currently $684/week minimum, pending DOL rule litigation), the employee is automatically NON-EXEMPT regardless of duties — entitled to overtime. (2) IF the duties test fails — e.g., a "manager" who spends 80% of time on non-managerial tasks — employee is non-exempt regardless of salary level. (3) State laws — CA, NY, WA have HIGHER salary thresholds ($66,560 CA in 2024) AND stricter duties tests. (4) Day-rate workers — the §7(g)(3) workweek-based fluctuating workweek calculation still applies; daily rates above the threshold don't automatically qualify for exemption. Wage-and-hour audits often re-classify "exempt" employees who didn't truly meet the test — back overtime owed can total years.