Hourly to Salary: What Your Hourly Rate Is Really Worth in a Year

If you just need a number, here it is. These are gross (before-tax) yearly amounts, assuming you're paid for all 52 weeks of the year:

The figures work in any currency. The rest of this guide explains the assumptions behind them, because those assumptions are where most conversions go wrong. You can run your own numbers in the Hourly Rate Calculator.

The formula, and three assumptions hiding in it

Yearly pay = hourly rate × hours per week × paid weeks per year.

At $25 an hour and 40 hours a week, that's 25 × 40 × 52 = $52,000. The often-quoted "2,080 hours a year" is just 40 × 52. Each part of the formula is an assumption, though:

1. Hours per week. Many full-time jobs are 40 hours a week; others are 37.5, for example 9 to 5 with an unpaid half-hour lunch. Your contract says which. At $25 an hour, the 2.5-hour gap is worth $3,250 a year: $52,000 against $48,750, or 2,080 hours against 1,950.
2. Paid weeks. The 52 assumes you're paid for every week, including holidays. If you take 2 weeks off unpaid, it's 50 weeks: 25 × 40 × 50 = $50,000.
3. Gross, not take-home. All of these are before income tax and other deductions. What lands in your bank account is less, and how much less depends on where you live.

Paid leave: what the law guarantees where you work

Whether those 52 weeks are all paid depends on your contract and on the minimum the law sets. The minimums differ a lot:

United States

There's no federal requirement for paid vacation. The Department of Labor states that the Fair Labor Standards Act does not require payment for time not worked, such as vacations, sick leave or holidays. Paid leave comes from your employer's policy or your contract, so check it before you assume 52 paid weeks.

United Kingdom

GOV.UK says most workers are legally entitled to 5.6 weeks' paid holiday a year; on a 5-day week that's at least 28 days. Employers can choose to count bank holidays as part of it. Part-time workers get the same 5.6 weeks, scaled to the days they work.

Canada

For employers regulated by the federal government, the Canada Labour Code gives 2 weeks of vacation after 1 year with the same employer, 3 weeks after 5 consecutive years and 4 weeks after 10. Vacation pay is 4%, 6% and 8% of gross wages for those three levels. If you work for a provincially regulated employer, check your province's or territory's employment standards instead.

Australia

Business.gov.au says full-time and part-time workers get 4 weeks of annual leave for every 12 months worked. Casual employees don't get annual leave.

What you earn per hour actually worked

Paid leave means a salaried employee earns their pay over fewer working hours than the year contains. That changes what the job is worth per hour you're actually at work.

Example (UK): a salary of £48,750 for a 37.5-hour week works out at £25.00 an hour across all 52 weeks. With the 5.6-week statutory minimum taken as holiday (including bank holidays), you work 52 − 5.6 = 46.4 weeks, or 46.4 × 37.5 = 1,740 hours. Per hour actually worked, that's £48,750 ÷ 1,740 = £28.02.

This matters most when you compare a salaried job with hourly or contract work that doesn't pay for time off.

Going the other way: salary to hourly

Divide the yearly salary by the paid hours in a year. A $60,000 salary is:

• $60,000 ÷ 2,080 = $28.85 an hour on a 40-hour week;
• $60,000 ÷ 1,950 = $30.77 an hour on a 37.5-hour week.

The same salary is worth almost $2 more an hour on the shorter week. When you compare two job offers, compare them per hour as well as per year.

Overtime in the US

Under the Fair Labor Standards Act, employees who are covered and not exempt must receive overtime pay for hours worked over 40 in a workweek, at at least 1.5 times their regular rate.

At $25 an hour, a 45-hour week pays 40 × $25 + 5 × $37.50 = $1,187.50. If every week looked like that, the year would come to $61,750 instead of $52,000. Overtime is rarely that regular, so treat it as a range rather than a promise. The Hourly Rate Calculator has an overtime option for this.

Employee or contractor: comparing the offers fairly

Suppose you're weighing a $60,000 salaried job (40 hours a week, with paid leave) against freelance work paid by the hour. What hourly rate would match the salary?

Not $28.85. As a contractor you're only paid for the hours you bill. If you take 4 weeks off and allow 2 weeks with no work between projects, you bill 46 weeks × 40 hours = 1,840 hours. To earn $60,000 over those hours, you need $60,000 ÷ 1,840 = $32.61 an hour, and that's before costs a contractor may have to cover personally, such as equipment, insurance and any benefits an employer would have provided.

The 46 weeks is an assumption, not a rule. Use your own estimate of billable weeks. The point is that an hourly rate and a salary only compare fairly when both are measured over the hours that are actually paid.

From gross to take-home

Everything above is before tax. To see roughly what reaches your account after income tax and payroll deductions, use the Salary Calculator, and for US federal income tax on its own, the Income Tax Calculator.

Last reviewed: 11 October 2026. Leave and overtime rules were checked against the official sources listed on that date. Your contract, award or collective agreement may give you more than these minimums. This is general information, not legal, tax or financial advice.