How this works
Converting an hourly wage to an annual salary sounds like a one-line multiplication, but real-world employment terms make it surprisingly nuanced. The naive formula — hourly × 40 hours × 52 weeks — gives a useful headline number ("$25/h is about $52,000/year") but ignores three things that meaningfully change the answer: how many hours you actually work per week, how many weeks per year you actually work (paid time off vs. unpaid time off vs. holidays), and whether you earn overtime above a threshold. This calculator handles all three so the annual figure reflects what you'll actually take home in gross pay before tax.
Paid vs. unpaid time off is the biggest source of confusion. If you're salaried with paid vacation, all 52 weeks are paid — you just don't work some of them. If you're hourly with unpaid PTO (typical for contractors and many US service workers), every week off is a week without pay, so the multiplier drops to 50 weeks (2 weeks unpaid) or 48 (4 weeks unpaid). The difference between "$25/h × 52 weeks" ($52,000) and "$25/h × 48 weeks" ($48,000) is real money — $4,000/year — and depends entirely on whether your time off is paid. Set the "weeks worked per year" field to whatever you actually expect to be on the clock and getting paid.
Overtime adds the other twist. In the US (and many other jurisdictions), non-exempt employees get 1.5× their hourly rate for hours above 40 in a week (the federal FLSA threshold; some states use daily thresholds too). If your normal week is 45 hours, you're earning 40 hours × rate + 5 hours × rate × 1.5 — not 45 hours × rate. The calculator applies overtime to the hours field automatically when you set the OT multiplier and the threshold. Salaried-exempt employees don't get overtime in the US, so leave the OT multiplier at 1.0 if that's your situation. Outside the US, check your local employment law — overtime rules vary widely (the EU caps weekly hours rather than mandating a premium; the UK has no statutory OT premium at all but most contracts include one).
The formula
hourly is your base hourly rate. hours_per_week is total scheduled hours including overtime. weeks_per_year is the number of weeks you actually get paid (typically 50–52 for salaried roles with PTO; 48 if you take 4 weeks unpaid). OT_multiplier is the overtime premium (1.5× is the US federal default; set to 1.0 if you don't earn OT). OT_threshold is the hours-per-week boundary above which OT applies (40 in the US under FLSA).
Example calculation
- A worker earns $25/hour. They work 40 hours per week, 50 weeks per year (2 weeks unpaid time off). No overtime. Hours_per_week (40) is at the OT threshold (40), so all hours are base.
- Base annual = 25 × 40 × 50 = $50,000. No overtime, so total annual = $50,000.
- Monthly = 50,000 ÷ 12 = $4,167. Weekly = 50,000 ÷ 50 = $1,000. Daily (5 days/week) = 1,000 ÷ 5 = $200.
- If the same worker did 45 hours/week with 1.5× overtime above 40: base = 25 × 40 × 50 = $50,000; OT = 25 × 1.5 × 5 × 50 = $9,375; total = $59,375. Five extra hours per week is worth $9,375/year on this rate.
Frequently asked questions
Why does the calculator default to 52 weeks per year?
A calendar year contains 52 weeks (technically 52.143). For salaried roles with paid time off — vacation, sick days, federal holidays — all 52 weeks are paid because PTO continues your pay during the time off. For hourly roles without paid time off, set the field to whatever you actually expect to be on the clock and getting paid: 50 if you take 2 weeks unpaid, 48 if you take 4. Contractors and freelancers often use 48 weeks as a planning baseline because it builds in 4 weeks of slack for vacation, sickness, and slow periods. There's no universally correct number — it depends entirely on your employment terms.
Is this gross pay or take-home pay?
Gross — what your employer pays you before deductions. Income tax, payroll tax (US Social Security and Medicare, UK NI, etc.), retirement contributions (401k, pension), health insurance premiums, and any other deductions all come off this number to produce your take-home pay. Net pay typically lands at 65-80% of gross depending on your country, state, deductions, and tax bracket. For an estimate of take-home pay, use a paycheck calculator that knows your country's tax tables.
How does this differ from the salary-to-hourly conversion?
It's the inverse operation. This calculator goes hourly → annual: you know your hourly rate and want to project total earnings. The salary-to-hourly direction starts with a quoted annual salary (typically from a job offer) and computes the implied hourly rate so you can compare across jobs with different schedules. The math is the same but the unknown swaps. Both calculators handle PTO and OT consistently — for the salary-to-hourly direction, you typically assume 52 weeks paid (since salaried roles include PTO) and divide annual ÷ (52 × hours/week) to get the implied rate.