Salary to Hourly

The standard conversion divides annual salary by 2,080 hours — 40 hours a week times 52 weeks. Reversing it, an hourly rate times 2,080 gives the annual equivalent. That is the arithmetic, and it is the number most job comparisons use.

It is also the number that misleads most often, because 2,080 assumes you work exactly 40 hours every week of the year. A salaried role that reliably runs 50 hours is really being paid over 2,600 hours, and the true hourly rate is roughly 20% below the headline conversion. Comparing a salaried offer against an hourly one on the 2,080 basis alone systematically flatters the salaried role whenever it carries longer hours.

Paid time off cuts the other way and is frequently ignored. A salaried employee with three weeks of paid leave still receives the full salary while working roughly 1,960 hours, which raises the effective hourly rate. An hourly worker without paid leave earns nothing during those weeks. Comparing the two fairly means accounting for both hours actually worked and hours paid but not worked.

Contractors and freelancers should not use this conversion at all when setting rates. A contract rate must additionally cover self-employment tax, health insurance, retirement contributions an employer would otherwise part-fund, unpaid time off, unbilled administrative hours, and the gaps between engagements. The billable fraction of a freelance year is well below 2,080 hours, and a rate derived from a salary equivalent will systematically undercharge. Everything runs in your browser — no login, no upload, and no figure you enter leaves the page.