The Hourly-to-Salary Formula
Hourly pay becomes an annual salary through simple multiplication:
Annual salary = hourly rate × hours worked per week × 52 weeks
At the standard full-time schedule of 40 hours a week, the last two factors collapse into a single number: 40 × 52 = 2080, the number of hours in a full-time work year. That gives the shortcut everyone uses:
Annual salary = hourly rate × 2080
So $25 an hour works out to $25 × 2080 = $52,000 per year. The same formula runs in reverse for salary to hourly: hourly rate = annual salary ÷ 2080. A $75,000 salary equals $75,000 ÷ 2080, or about $36.06 per hour.
Common Hourly Rates and What They Pay Annually
At 40 hours per week, 52 weeks per year, gross pay before taxes:
| Hourly rate | Annual salary | Monthly | Biweekly |
|---|---|---|---|
| $15.00 | $31,200 | $2,600 | $1,200 |
| $20.00 | $41,600 | $3,467 | $1,600 |
| $25.00 | $52,000 | $4,333 | $2,000 |
| $30.00 | $62,400 | $5,200 | $2,400 |
| $50.00 | $104,000 | $8,667 | $4,000 |
| $75.00 | $156,000 | $13,000 | $6,000 |
| $100.00 | $208,000 | $17,333 | $8,000 |
Notice the mental-math trick in the table: doubling the hourly rate doubles everything else. A $50-an-hour job pays exactly twice what a $25-an-hour job pays, at the same schedule.
When the 2080-Hour Year Does Not Apply
2080 is a convention, not a law. Three common situations change it.
Part-time schedules. If you work 30 hours a week, your year is 30 × 52 = 1560 hours. At $25 an hour that is $39,000, not $52,000. Always use your real weekly hours instead of the default 40.
Unpaid time off. The 2080 figure assumes you are paid for all 52 weeks. If you take two unpaid weeks off, your year drops to 2000 hours: 40 × 50. At $25 an hour that is $50,000 instead of $52,000. Paid holidays and paid vacation do not change the number, because you are paid for those hours anyway.
Irregular hours. Shift workers and seasonal employees rarely hit exactly 40 hours every week. The honest approach is to use your average weekly hours across the year. If some weeks are 32 hours and some are 48, a 40-hour average is still the right input for an annual estimate.
Biweekly vs. Semimonthly Pay
This is the most misunderstood part of salary math. The two sound alike but produce different paychecks.
Biweekly means a paycheck every two weeks: 26 paychecks a year. Each year has two months with three paychecks instead of two. A $52,000 salary pays $2,000 per biweekly check ($52,000 ÷ 26).
Semimonthly means two paychecks per month, usually on the 1st and 15th: 24 paychecks a year, and you never get three in a month. The same $52,000 salary pays $2,166.67 per semimonthly check ($52,000 ÷ 24).
The annual total is identical. Only the check size and the calendar differ. When a job offer says "paid semimonthly," divide by 24, not 26, or you will budget against the wrong number. And if you are paid biweekly, plan for the two three-paycheck months; they are a good time to knock down debt or build savings instead of absorbing them into spending.
How Overtime Is Calculated
Under the federal Fair Labor Standards Act, non-exempt hourly employees earn 1.5 times their regular hourly rate (time and a half) for hours worked beyond 40 in a single week. Some states and employers set stricter rules, such as daily overtime past 8 hours, but 1.5× past 40 is the federal floor.
The math: overtime pay = hourly rate × 1.5 × overtime hours. At $25 an hour with 5 overtime hours a week, that is $25 × 1.5 × 5 = $187.50 extra per week, or $9,750 across the year. Added to the $52,000 base, total compensation reaches $61,750.
Two caveats. First, salaried exempt employees generally do not earn overtime at all, which is why comparing an hourly job with overtime to a salaried job requires doing this math, not just comparing base rates. Second, overtime is taxed like ordinary income, so the take-home bump is smaller than the gross figure.
Gross Pay vs. Net Pay: Why Your Check Is Smaller Than the Math
Every number in this guide is gross pay: what you earn before anything is taken out. Your actual paycheck is net pay, and it is always lower. The gap comes from four buckets:
Income taxes. Federal and, in most states, state income tax, withheld from each check based on your W-4. Higher earners lose a larger share because of progressive tax brackets.
Payroll taxes. Social Security (6.2% up to the annual wage cap) and Medicare (1.45%) come out of every paycheck, with no exemption for hourly workers.
Benefits deductions. Your share of health insurance premiums, dental and vision, and any HSA or FSA contributions are subtracted before you see the money.
Retirement and other deductions. 401(k) or 403(b) contributions, union dues, and wage garnishments all reduce net pay.
A common rule of thumb is that net pay lands around 70 to 80% of gross for middle incomes, but your actual percentage depends on your tax bracket, state, and elections. When budgeting for rent or a mortgage, always plan around net pay. Our mortgage calculator and budget planner pair well with these numbers.
Comparing Job Offers Across Pay Periods
Offers arrive in different formats, and the headline number can mislead. A $28-an-hour offer sounds modest next to a $58,000 salary, but $28 × 2080 = $58,240, so the hourly offer is actually slightly better before benefits.
The reliable method is to convert every offer to the same period before comparing. Hourly offers become annual through the 2080 rule; salaried offers become hourly by dividing by 2080. Then factor in what the conversion misses: overtime eligibility, paid time off, health insurance premiums, retirement matching, and bonuses. A $55,000 salary with a 6% 401(k) match and 20 paid days off can beat a $60,000 salary with none of those.
Also watch the raise math. A $2-an-hour raise equals $4,160 a year at full time, which is roughly an 8% raise on $52,000. Converting raises into both forms makes it obvious whether an offer is meaningful or cosmetic. Try it with our percentage calculator to see the percentage side.
Frequently Asked Questions
What is the formula for converting hourly pay to a salary?
Hourly rate × hours per week × 52 weeks. At a standard 40-hour week this becomes hourly rate × 2080. For example, $25 per hour × 2080 = $52,000 per year in gross pay.
How many work hours are in a year?
2080 for a standard full-time schedule: 40 hours per week times 52 weeks. Unpaid time off reduces this number — two unpaid weeks off leaves 2000 hours.
How do I convert my salary to an hourly rate?
Divide the annual salary by the number of hours worked per year. At 40 hours a week that is salary divided by 2080. A $75,000 salary works out to about $36.06 per hour.
What is the difference between biweekly and semimonthly pay?
Biweekly pay arrives every two weeks (26 paychecks a year, with two months containing three paychecks). Semimonthly pay arrives twice a month, usually the 1st and 15th (24 paychecks a year, never three in a month). The annual total is the same; only the per-check amount differs.
How is overtime pay calculated?
Under the federal Fair Labor Standards Act, non-exempt hourly employees earn 1.5 times their regular hourly rate for hours worked beyond 40 in a week. At $25 an hour, 5 weekly overtime hours add $187.50 per week, or $9,750 per year.
Why is my paycheck smaller than my salary divided by 26?
Salary conversions give gross pay, before anything is taken out. Your actual check subtracts federal and state income tax, Social Security and Medicare taxes, and deductions like health insurance premiums and retirement contributions. That is the gap between gross and net pay.