ReckonBoxConverting a wage, both directions
An hourly rate becomes a yearly salary by multiplying it by the hours you work a week and the weeks a year you are paid. At $25 an hour over 40 hours and 52 paid weeks that is 2,080 hours and $52,000 before tax. Run it the other way and $52,000 comes back as $25.00 an hour.
Every figure on this page is gross. No income tax, no Social Security, no Medicare, nothing withheld, which is what makes it a conversion and not a paycheck.
Why a salary has two hourly rates
The contract rate divides your salary by every hour you are paid for; the effective rate divides it by the hours you actually work. With no time off taken they are the same number. The moment you take paid leave they separate, and the second one is the rate you genuinely earn.
Take that $52,000 again. Four paid weeks off leaves 1,920 hours actually worked, down from 2,080. The salary has not moved, so the arithmetic gives $27.08 an hour, up from $25.00. You earned the same money in less time, which is exactly what paid leave is.
| $52,000, 40 hours a week | Hours | Rate |
|---|---|---|
| All hours you are paid for | 2,080 | $25.00 |
| Hours you actually work, 4 weeks off | 1,920 | $27.08 |
The same four weeks, opposite signs
This is the part that catches people, and it is why both directions live on one page.
Going from an hourly rate to a salary, weeks you are not paid for come straight off the total. Four unpaid weeks at $25 and 40 hours means 48 paid weeks, and the year is $48,000, down from $52,000. You lost $4,000.
Going from a salary to an hourly rate, four paid weeks off do the reverse. The salary is fixed at $52,000, the hours fall, and the rate climbs to $27.08. You gained.
Same field, same number, opposite direction, and the difference is entirely whether somebody pays you for the time. A calculator that only runs one way can show you one half of that.
2,080 hours is a convention, not a fact
Most employer-facing tools assume a 2,080-hour year, being 40 hours across 52 weeks. Some work from 49 or 48 weeks instead. On a $60,000 salary the first gives $28.85 an hour and the second $30.61, a 6% spread on identical pay, and the reader almost never chose which convention they got.
So this prints the divisor it used. If the number surprises you, the hours behind it are on screen.
Overtime, and why the multiplier is fixed
Overtime is not paid at your rate. For a workweek longer than forty hours, 29 U.S.C. 207(a)(1) requires "a rate not less than one and one-half times the regular rate" for covered employees.
Five overtime hours a week at $25 therefore add $9,750 across a 52-week year, not the $6,500 that straight time would give. The multiplier is fixed at 1.5 here and not offered as a field, because the statute sets a floor and a box that accepted 1.2 would be modelling something an employer cannot lawfully do.
Overtime applies only when converting a rate into a salary. Applying it to an annual figure is not a conversion, so that field disappears in the other direction.
What this does not cover
No tax, deliberately, and that is the main limit. Your take-home will be materially lower once federal and state income tax, Social Security and Medicare come out, and the salary take-home calculator does that job with real brackets and all 51 jurisdictions.
Beyond tax, this treats a week as a week. It does not model shift differentials, a second rate for weekends, bonuses, commission, or the employer-side cost of benefits that makes an employee more expensive than their wage. Exempt salaried employees are generally not owed overtime at all, and whether a role is exempt turns on duties and a salary threshold, whatever the contract calls it. For a question about your own classification or entitlement, an employment lawyer or your state labour office is the right place to ask.
Frequently asked questions
How do I convert an hourly rate to a yearly salary? Multiply the rate by the hours you work a week, then by the weeks a year you are paid. At $25 an hour over 40 hours and 52 paid weeks that is 2,080 hours and $52,000 a year, before tax. Overtime is extra: five hours a week at the statutory 1.5x adds $9,750 across the year, not $6,500.
What is my hourly rate on a $52,000 salary? Divide the salary by the hours you are paid for. $52,000 over a standard 2,080-hour year is $25.00 an hour. If you take four paid weeks off, you still earn $52,000 for 1,920 hours actually worked, so the rate you really earn is $27.08. Both figures are shown, because they answer different questions.
Why are there two hourly rates? The contract rate divides your salary by every hour you are paid for, including paid holidays. The effective rate divides it by the hours you actually work. Paid time off does not change your salary, so it leaves the contract rate alone and pushes the effective rate up. With no time off taken the two figures are identical.
Does paid time off raise or lower my hourly rate? It depends which way you are converting, and this catches people out. Going from an hourly rate to a salary, weeks you are not paid for come straight off the annual figure: four unpaid weeks at $25 and 40 hours is $4,000 gone. Going from a salary to an hourly rate, paid time off leaves the salary untouched and cuts the hours, so the rate goes up from $25.00 to $27.08. Same four weeks, opposite direction.
Is a year 2,080 hours? 2,080 is the standard figure, being 40 hours across 52 weeks, and it is what most employer-facing calculators assume. It is a convention rather than a fact: some tools work from 49 or 48 working weeks instead, which on a $60,000 salary is the difference between $28.85 and $30.61 an hour. This tool prints the divisor it used so the figure is never a mystery.
Does this show my take-home pay? No. Every figure on this page is gross, before income tax, Social Security, Medicare and any deductions, which is what makes it a conversion and not a paycheck. For the after-tax number with federal brackets, FICA and real state rates, use the salary take-home calculator instead.