Hourly vs. Salary: How to Compare Two Job Offers Fairly
By the Find a Calculator editorial team ·
To compare an hourly job with a salaried one, convert both to the same unit and use the hours you will really work. A full-time year is 2,080 hours: 40 hours a week for 52 weeks. Multiply an hourly wage by 2,080 to get a salary, or divide a salary by 2,080 to get an hourly rate.
The basic conversion
An offer of $28 an hour equals $28 x 2,080 = $58,240 a year. A salary of $58,000 equals $58,000 / 2,080 = $27.88 an hour. On paper the two are almost identical. Use the hourly to salary calculator or the salary to hourly calculator to run your own numbers.
Then adjust for real hours
Salaried roles that are exempt from overtime pay the same amount however long the week runs. If the $58,000 job routinely takes 45 hours a week, the effective rate falls to $58,000 / (45 x 52) = $24.79 an hour.
The hourly job moves the other way. Five hours of overtime a week at time and a half adds 5 x $42 = $210 a week, or $10,920 a year, lifting the $28 job to $69,160. The overtime calculator handles any multiplier.
| Scenario | Annual pay | Effective hourly rate |
|---|---|---|
| $28/hour, 40 hours | $58,240 | $28.00 |
| $28/hour, 45 hours with overtime | $69,160 | $29.56 |
| $58,000 salary, 40 hours | $58,000 | $27.88 |
| $58,000 salary, 45 hours | $58,000 | $24.79 |
Count unpaid time
Hourly workers are often unpaid for holidays, sick days and vacation. Two unpaid weeks cuts the working year to 50 weeks and the $28 job to $56,000. Salaried pay normally continues through paid leave, which is worth real money: ten paid days off is about 3.8% of a year's pay.
Benefits and taxes
- Employer health insurance, retirement matching and bonuses can be worth 20% to 30% of base pay. Add their dollar value to each offer before comparing.
- Independent contractors pay both halves of Social Security and Medicare tax and buy their own insurance, so a contract rate needs to be meaningfully higher than an employee wage to break even.
- Compare after-tax figures when the offers differ a lot. The income tax calculator estimates federal tax on each.
A five-step comparison
- Write down the realistic weekly hours for each job.
- Convert each offer to annual pay, including expected overtime.
- Subtract unpaid weeks from the hourly job.
- Add the dollar value of benefits to each.
- Divide each total by the hours actually worked to get a true hourly rate.
Open the Salary to Hourly CalculatorConvert an annual salary to an equivalent hourly wage.