How to Convert Hourly Pay to an Annual Salary

Comparing an hourly job with a salaried one means putting both on the same footing. The conversion is a short multiplication, but the assumptions behind it decide whether the answer is realistic.

The formula

Annual pay  = hourly rate × hours per week × weeks per year
Monthly pay = annual pay ÷ 12
Weekly pay  = hourly rate × hours per week

The common assumption is 40 hours a week for 52 weeks, which is 2,080 hours a year.

Example

An hourly rate of 24, working 40 hours a week for 52 weeks.

• Weekly: 24 × 40 = 960
• Annual: 960 × 52 = 49,920
• Monthly: 49,920 ÷ 12 = 4,160
• Biweekly: 960 × 2 = 1,920

Adjusting for unpaid time

If two weeks a year are unpaid, use 50 weeks instead of 52: 960 × 50 = 48,000. That is a difference of 1,920 a year, so it is worth deciding honestly how many weeks you will be paid for.

From salary to hourly

Hourly rate = annual salary ÷ (hours per week × weeks per year)

A salary of 52,000 for a 40-hour, 52-week year gives 52,000 ÷ 2,080 = 25 an hour.

Things the formula does not include

• Tax and social contributions. These figures are gross, before deductions.
• Overtime premiums, bonuses and shift allowances.
• Benefits such as pension contributions and paid leave, which can make a salaried role worth more than its headline figure.
• Unpaid breaks. If your 40 hours include a paid lunch, use the paid hours.

Common mistakes

• Multiplying by 12 months of 4 weeks. A month averages 4.33 weeks, so that gives 48 weeks, not 52.
• Using hours on the contract rather than hours actually paid.
• Comparing gross hourly pay with net salary, or the reverse.

The hourly to annual salary calculator converts both directions and adds monthly, biweekly, weekly and daily figures.

Try it yourself

1. What is the annual pay for 18.50 an hour, 37.5 hours a week, 52 weeks a year?
2. What hourly rate matches a 60,000 salary for a 40-hour, 52-week year?
3. What is the annual pay at 30 an hour, 40 hours a week, for 50 paid weeks?

Answers: (1) 36,075; (2) 28.85 an hour (60,000 ÷ 2,080); (3) 60,000.