Salary ↔ Hourly Converter

The standard conversion assumes a full-time year of 2,080 hours — 40 hours a week times 52 weeks. To go from salary to hourly, divide the annual figure by 2,080. To go the other way, multiply the hourly rate by 2,080 for the annual equivalent, or by 40 for weekly and by about 173.3 for monthly. These are gross figures, before taxes and deductions.

The 2,080-hour assumption is a convention, not a law. If you take two weeks of unpaid leave, your real hours drop to 2,000; if you regularly work 50-hour weeks, the effective hourly value of a fixed salary falls accordingly. Contractors should also remember that an hourly rate often has to cover unpaid time off, self-employment taxes, and benefits an employer would otherwise provide — which is why contract rates are typically higher than the salaried equivalent.

Always compare gross to gross and net to net. A salary's value includes benefits — health insurance, paid leave, retirement matching, employer-paid payroll taxes — that an hourly contract usually does not. A fair comparison adds the dollar value of those benefits to the salary side before judging which offer pays more.

Your real hourly rate is lower than the nominal one. Divide your take-home pay (not gross) by the total hours your job actually consumes — including commute, getting ready, and unpaid overtime — and the figure often drops by a third or more. That "real rate" is the right number for deciding whether an extra hour of work or a time-saving purchase is worth it.

When setting a freelance rate, a common rule of thumb is to take the salary you want, then add 25–50% to cover self-employment taxes, unpaid gaps between clients, and benefits you now buy yourself. Quoting your old salaried hourly rate as a freelancer is the classic mistake that leaves new contractors underpaid.