Why Convert Between Salary and Hourly Rate?
Whether you're evaluating a job offer, setting freelance rates, or comparing compensation packages, understanding both your hourly and annual earnings is essential. This bidirectional converter helps you instantly translate between the two formats, making it easier to compare opportunities and understand your true earning potential.
How the Calculation Works
The formula is straightforward: Annual Salary = Hourly Rate × Hours per Week × Weeks per Year. For a standard full-time position (40 hours per week, 52 weeks), that's 2,080 hours annually. Our calculator lets you customize both values for non-standard schedules.
Converting Salary to Hourly Rate
If you know your annual salary and want to understand your hourly value, simply divide by total working hours. This helps you evaluate overtime decisions, compare with hourly positions, and understand what your time is truly worth.
Converting Hourly Rate to Salary
When you're offered an hourly position or setting freelance rates, converting to an annual equivalent helps you budget, plan, and compare with salaried positions. Remember to factor in that hourly positions may not include benefits.
Factors to Consider
- Benefits and healthcare (typically worth 20-30% of salary)
- Paid time off and holidays
- Retirement contributions and matching
- Commute time and costs
- Work-from-home flexibility value
Comparing Job Offers Effectively
When comparing a salaried position with an hourly or freelance opportunity, use this calculator to level the playing field. A $75,000 salary requiring 50 hours per week yields a lower hourly rate than a $65,000 job with strict 40-hour weeks.
Setting Freelance Rates
If you're transitioning from full-time employment to freelancing, your calculated hourly rate is just the starting point. Freelancers typically need to charge 25-50% more to cover self-employment taxes, healthcare, equipment, and periods without work.
Frequently Asked Questions
How do I account for unpaid time off?
Adjust the "weeks per year" field. If you take 2 weeks unpaid vacation, use 50 weeks instead of 52 for a more accurate calculation.
Should I include bonuses in my salary?
For the most accurate hourly rate, include guaranteed bonuses in your annual salary. For variable performance bonuses, calculate separate scenarios to understand the range.
How does this help with contract negotiations?
Knowing your hourly equivalent helps you evaluate counter-offers. A $5,000 raise translates to about $2.40 more per hour for a standard schedule, while a $5/hour raise equals $10,400 more annually.