To convert an hourly wage to an annual salary, multiply the hourly rate by the hours you work each week and by 52 weeks. For a standard full-time job of 40 hours a week, that is 2,080 hours a year. At 25 an hour, the annual pay is 25 × 2,080 = 52,000. This guide shows the full set of conversions, how to adjust for real-life details, and how to compare job offers fairly.

The Basic Conversions

  • Annual pay = hourly rate × hours per week × weeks per year.
  • Weekly pay = hourly rate × hours per week.
  • Monthly pay = annual pay ÷ 12.
  • Hourly rate = annual pay ÷ 2,080 for a standard full-time job.

For a 25 hourly wage and a 40-hour week: weekly pay is 1,000, pay every two weeks is 2,000, monthly pay is about 4,333, and annual pay is 52,000. A month has about 173.3 working hours (2,080 ÷ 12), which is useful when comparing monthly pay and hourly pay.

Converting a Salary to an Hourly Rate

Divide the annual salary by the number of hours you work in a year. A salary of 60,000 for a 40-hour week is 60,000 ÷ 2,080 = 28.85 an hour. If you regularly work 45 hours a week, the real rate is lower: 60,000 ÷ (45 × 52) = 25.64 an hour. This is why salaried staff who work long hours are often earning less per hour than they realise.

Adjust for Unpaid Time Off

The 52-week figure assumes you are paid for every week. If you take unpaid leave, your annual income is lower. For example, a 25 hourly wage with 2 unpaid weeks off earns 25 × 40 × 50 = 50,000, not 52,000. Many employers pay for holidays and sick days, in which case the 52-week figure is right. Check your contract.

Overtime

In many countries, extra hours beyond a standard week must be paid at a higher rate, often 1.5 times the normal rate. At 25 an hour, overtime is 37.50 an hour. Rules vary by country and by job type, and some salaried roles are exempt, so check your local labour law. Even a few hours of overtime each week can raise annual pay noticeably, so include it when you compare offers.

Gross Pay vs Take-Home Pay

All of the numbers above are gross pay, before tax and other deductions. What reaches your bank account depends on income tax, social security or payroll contributions, pension contributions and health insurance. Rates differ widely between countries. As an illustration only, if deductions came to 20% of gross pay, a 52,000 salary would leave 41,600 a year, or about 3,467 a month. Use a tax calculator for your own country, and see our guide to saving money every month for what to do with the difference.

Comparing Job Offers Fairly

  • Convert every offer to the same unit, such as annual pay or effective hourly pay.
  • Count the hours you will really work, including a commute you cannot avoid or unpaid overtime.
  • Add the value of benefits: pension contributions, health cover, bonuses, paid leave and training.
  • Subtract extra costs of the job, such as travel, parking or a required uniform.

Contractors and Freelancers

If you are self-employed, your hourly rate must cover much more than a salaried worker's pay. You pay your own taxes and insurance, you have no paid leave, and you cannot bill every hour you work. Suppose you want the equivalent of a 52,000 salary and expect 1,500 billable hours a year. The bare minimum is 52,000 ÷ 1,500 = 34.67 an hour. Adding 25% for overheads and benefits gives about 43.33 an hour. A contractor rate that is 1.25 to 1.5 times the employee equivalent is a common rule of thumb.

Compare on one basis

Turn every offer into annual pay and an effective hourly rate using the hours you will really work, then adjust for leave, benefits and the extra costs of the job.