How to convert an hourly wage to a salary — and back

A $32-an-hour contract and a $72,000 salaried offer aren't directly comparable until you put them in the same units. The conversion itself is one multiplication — the part people get wrong isn't the math, it's which "weeks per year" to plug in.

The formula

Annual pay = hourly rate × hours per week × weeks per year. Run it backwards to go the other way: hourly rate = annual salary ÷ (hours per week × weeks per year).

A real example

Say you're weighing an hourly contract at $32/hour, 40 hours a week, against a salaried offer of $72,000.

1. Contract, paid for every week worked: 32 × 40 × 52 = $66,560 a year, or 66,560 ÷ 12 ≈ $5,546.67 a month.
2. The salaried offer converts back to 72,000 ÷ (40 × 52) = 72,000 ÷ 2,080 ≈ $34.62 an hour — about $2.62 more per hour than the contract rate.

The trap: which "weeks per year"

Both numbers above assumed 52 paid weeks. But an hourly contract usually only pays for weeks you actually work. Take two weeks of unpaid time off and the same $32/hour role drops to 32 × 40 × 50 = $64,000 — $2,560 less than the "52-week" figure suggested.

The salaried offer hides the opposite adjustment. If two of its 52 paid weeks are vacation, you only work 50 of them — so the effective hourly rate for hours actually worked is 72,000 ÷ (40 × 50) = 72,000 ÷ 2,000 = $36.00, a full $1.38 higher than the naive $34.62. Paid time off is real compensation; leaving it out of the conversion understates a salaried offer and overstates an hourly one.

What to actually compare

Before converting, ask each side directly: how many weeks are paid, and of those, how many do you actually work? Use "weeks per year" = weeks paid to find total compensation, and "weeks per year" = weeks worked to find the effective hourly rate for your time. They're different numbers on purpose — conflating them is how a worse offer looks better on paper.

A quick mental shortcut

Forty hours a week for fifty working weeks comes out to almost exactly 2,000 hours a year (40 × 50 = 2,000), so a fast rule of thumb is annual ≈ hourly × 2,000. At $32/hour that's $64,000 — matching the 50-week figure above exactly, because that's precisely what the shortcut is approximating. It's fine for a gut check on a job posting; use the full formula with your actual hours and weeks for anything that matters.

What this doesn't capture

This is a gross-pay comparison only. It leaves out benefits (health insurance, a 401(k) match), payroll taxes, and the fact that salaried roles typically carry no overtime while hourly roles often pay 1.5× past 40 hours a week. Treat the converted number as the starting point for a comparison, not the whole picture.

Run your own numbers

The free Hourly → Salary calculator does the multiplication instantly for your rate, hours and weeks — run it once with weeks paid and once with weeks worked to see both figures side by side, entirely on your device.