Converting Hourly Pay to Salary (and Back), Correctly

The basic conversion

For a stable schedule:

Annual gross pay = hourly rate × paid hours per week × paid weeks per year

At $28 per hour, 40 paid hours for 52 weeks equals $58,240. The familiar shortcut—hourly rate × 2,080—assumes exactly 40 paid hours and 52 paid weeks.

If two weeks are unpaid, annual base pay becomes $56,000. If hours vary, use expected annual paid hours or calculate several cases. The hourly-to-salary calculator lets you change hours and weeks instead of hiding the assumption.

To reverse the calculation:

Hourly equivalent = annual salary ÷ expected annual work hours

A $60,000 salary at 2,080 hours is $28.85 per hour. At 2,400 actual hours, it is $25.00. Salaried status does not by itself determine overtime eligibility.

Add overtime separately

If a nonexempt employee earns $28 and consistently works five overtime hours at time-and-a-half, weekly overtime is $210. Across 52 weeks that is $10,920, raising estimated cash pay to $69,160.

Do not include overtime that is irregular or unavailable in a conservative budget. Confirm whether bonuses, shift differentials, or other compensation enter the regular-rate calculation under applicable law.

Put benefits into annual dollars

Compare employer health contributions, retirement match, paid leave, bonuses, stock compensation, disability coverage, commuting, equipment, and schedule flexibility. Avoid counting the retail price of a benefit you would not buy.

Paid time off is especially important. An hourly offer with no paid leave loses wages during vacations and illness; a salary with paid leave does not. Employer retirement match has value only to the extent you are eligible, contribute enough, and remain through vesting.

Compare downside cases

For hourly work, model reduced shifts and unpaid weeks. For salary, model peak-season hours and uncompensated overtime. Compare gross cash, estimated take-home pay, annual hours, and benefit value separately.

Taxes are not determined by whether compensation is called hourly or salary. Withholding may look different, but final liability depends on income and tax circumstances.

Frequently asked questions

Why is hourly rate × 2,000 sometimes used?

It is a quick round estimate, not the 2,080-hour full-year assumption. State the convention when comparing figures.

Should bonuses count as salary?

Keep guaranteed base pay separate from variable compensation. Use a conservative multi-year average only when the bonus history is dependable.

Is salary always exempt from overtime?

No. Exemption depends on legal salary and duties tests, not the label alone.